New Intel server chip designed entirely in India

Land of outsourcing turns to engineering.

Published September 19, 2008 2:35PM (EDT)

Amid all the chaos going on this week, there was a blip in the I.T. world -- Intel launched its snazzy new 45-nanometer six-core Xeon 7400 server processor, code-named Dunnington. This bad boy boasts speeds of up to 2.66 GHz (on each of the six cores) and power levels of less than 11 watts per core, which is quite low. This means that as is the usual order of things, servers will get faster and more energy efficient. And while this model is first going to hit servers (data centers and the like), its basic technology will likely also get transferred to consumer desktops and laptops pretty soon. But that's not the real news here. This chip, unlike every other chip, from every other company before it, was fully designed in India, not Silicon Valley.

While India is well known and sometimes ridiculed for its role in outsourcing, it's not nearly as well known for its engineering prowess. Business Standard, an Indian business magazine, touts the fact that the engineering team headed by Bangalore native Praveen Vishakantaiah finished two months ahead of schedule. IDG News Service, meanwhile, takes more of a cautious look at India's engineering capabilities. IDG quotes Vinay Deshpande, one of the developers on the Simputer (a hand-held computer that has floundered), as saying: "The situation is a lot better than it was some years ago, but most Indian operations of multinational companies are still far away from defining and architecting products." That said, those guys in Bangalore must be doing something right, as this chip is for the high-end server market, which according to the Financial Times generated sales of nearly $14 billion industrywide in the second quarter alone. In 2004, in a cover package in Wired magazine, editor Chris Anderson argued that sending menial I.T. tasks to India not only lets us spend more time on the creative side of design but eventually will help India catch up too.

It's not hard to see how outsourcing to India could lead to the next great era in American enterprise. Today, even innovative firms spend too much money maintaining products: fixing bugs and rolling out nearly identical 2.0 versions. Less than 30 percent of R&D spending at mature software firms goes to true innovation, according to the consulting firm Tech Strategy Partners. Send the maintenance to India and, even after costs, 20 percent of the budget is freed up to come up with the next breakthrough app. The result: more workers focused on real innovation. What comes after services? Creativity.

Looks like that prescient vision has finally arrived.

By Cyrus Farivar

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