Intel's Nature

Electronic News, July 5, 1999 by Robert Ristel-Hueber

There's a well-known fable about a scorpion that asks a frog to give him a ride across a pond. The frog is understandably worried about getting stung, but the scorpion assures him that he'll be perfectly safe because, after all, both their lives are at stake. About midway across the pond, the scorpion stings the frog and they begin to sink. "Why did you do it? Now we both shall die," gasps the frog with his last breath. "I couldn't help it," replies the scorpion. "It's my nature."

I was reminded of that story recently because of Intel Corp.'s dealings with Via Technologies. About a month ago, Intel filed a lawsuit against Via, but immediately withdrew the suit. Last week, Intel filed the suit again, this time for real.

Intel claimed breach of contract, patent infringement, and unfair competition. Now, Intel sells six times as many chipsets than Via, so it probably isn't too worried about maintaining its dominance in that business. Further, the chipset market isn't really critical to Intel except to enable sales of its bread-and-butter microprocessors. So, why did Intel do it?

I suspect this is why: Intel has long staked its future on producing ever more powerful microprocessors. A few years ago, it determined that a memory bandwidth bottleneck threatened that progression, and that Rambus offered the best solution to the problem. Therefore, Intel decided that the industry must adopt Rambus.

Intel has used a combination of bribes and threats to achieve its goal. When DRAM vendors became reluctant to invest in costly Rambus technology, Intel handed out about a billion dollars to persuade them. But it also imposed gag clauses in the contracts of many of those same companies in order to choke off any open discussion of the subject.

Via was a threat to this grand plan. If Via offered a PC-133 chipset, it might be embraced by PC vendors, delaying the adoption of Rambus.

I guess our industry has become totally inured to Intel's nature to swallow this totalitarian behavior. How can it be that Intel alone gets to decide what is best for so many companies? How can a company think of itself as having the right to determine the course of the largest industry in the United States?

Robert Noyce and Gordon Moore founded Intel and made it successful. But Andrew Grove is responsible for the juggernaut we know today. Grove was tough as nails; after all, he managed to survive both the Nazis and Communists. There is no question that Intel would not have become the profit machine it is today without Grove's relentless drive. But part of his legacy is also a company that thinks nothing of pushing around an entire industry. Intel seems to view itself as a wise parent, or perhaps a benevolent dictator. Either way, it is Intel's viewpoint that tends to prevail these days.

Substituting the ambitions of a single company for the collective wisdom of an entire industry is simply bad business. What if Intel is wrong about Rambus being the correct solution? There is already ample evidence that Intel's high-end, PC-centric vision has delayed the flowering of more ubiquitous computing.

Craig Barrett, Grove's successor, appears to be a milder personality than Grove, but there have been few indications that he's inclined to rein in Intel's hegemonic tendencies. The federal government seems to have backed away from vigorous enforcement of antitrust laws. So, for the time being at least, our industry will have to get used to having a scorpion riding on its back.