Two Thirds Done

Thoughts and experiences of an eighty one year old Wild Duck.

Avram Miller by the sea
EN | IT

587 posts since 2006

Category: Intel

  • Intel recently announced it is spinning out Intel Capital.

    Les Vadasz and I co-founded Intel Capital in 1991. Les had hired me in 1984, and he was the only person I reported to during my 15 years at Intel. He was among the original 12 people who started Intel, appearing as employee #3. Sadly, he is the only one of that group who is still alive. Les and I met a few weeks ago when I was in California visiting friends and family. He was my mentor, partner, and remains my friend.

    Initially, Intel Capital was named Corporate Business Development (CBD). It wasn’t renamed to Intel Capital until after I left in 1999. In fact, I started the precursor to CBD in 1988, reporting to Les. I had a small group focused on minority investments and M&A. At the time, my focus was more on M&A, as I wanted to expand Intel’s business into areas like communications, networking, and graphics.

    After several attempts to acquire networking companies—Cisco was deemed too expensive, and 3Com was “too screwed up,” according to Andy Grove—I came to the conclusion that we couldn’t afford the companies we liked, and we didn’t like the ones we could afford. Watching what happened to the few companies we did acquire also taught me a valuable lesson: Intel’s culture was so strong and insular that it would reject acquisitions like “antibodies attacking a foreign object.” This led me to shift the focus toward early-stage companies.

    By 1991, both Andy Grove (then CEO) and Les concluded there was significant benefit in taking minority investments, not just in early-stage companies but also in more mature ones. Andy asked Les to take overall responsibility for these activities (Les was one of the most senior executives at Intel) and probably added something like, “And keep Avram under control.”

    Les and I worked together to define the role of CBD/Intel Capital. We settled on three major objectives:

    1. Investments that would grow Intel’s current business: A great example was my leadership in developing residential broadband, which played a major role in driving the home computer market for PCs.

    2. Gaining strategic insights to guide Intel’s future business plans: Unfortunately, we had limited success here—not because we didn’t gain insights, but because we couldn’t exert enough influence within Intel to act on them.

    3. Achieving reasonable financial returns: We knew we had to be profitable quickly, or Intel’s “bean counters” would make our lives miserable. On this front, we exceeded all expectations. We made buckets of money. By the time I left, Intel Capital had $9 billion in assets (mostly from gains) and had already taken about $3 billion off the table.

    We didn’t operate like a traditional venture capital group. No one had carry-interest. Compensation was the same as for the best of Intel’s employees: salary, bonuses, and stock options. Les and I were well-compensated, though we could have made more as partners in a VC firm. However, making money wasn’t our primary driver; we believed deeply in Intel. Those who worked for us didn’t fare as well financially, as they didn’t benefit as much from stock options. Still, many learned the trade and eventually moved on, which we were okay with. Recruiting and training excellent people from within Intel was a core part of what we did.

    Over time, Les expanded his team, and I expanded mine. My efforts were recognized when I was named one of Intel’s 33 corporate officers, a milestone I achieved thanks to Les and Andy’s support.

    After Les retired in 2003, Arvind Sodhani, Intel’s former Treasurer, took over Intel Capital. From what I understand, Arvind focused more on returns on investment than on the broader strategic impact of the group. However, I can’t say for sure—I wasn’t there.

    I firmly believe corporate venture capital is a strategic function and shouldn’t be driven primarily by financial returns.

    Intel is going through tough times now, and it’s unclear if the company can survive. This is the result of a series of bad decisions, particularly in the selection of CEOs, starting with Craig Barrett in my opinion. Intel’s board has been one of the worst I’ve ever observed, and this decline started when Andy Grove became chairman.

    Spinning out Intel Capital is likely the right decision given Intel’s current situation. Nevertheless, it makes me sad.

  • Intel Inside the PC Jail

    In the 90s Intel Capital invested in Broadcom, initially as part of Intel’s ethernet initiatives. This investment was later augmented in support of our very successful effort to create residential broadband, an effort I was spearheading. Intel became the largest outside shareholder of Broadcom owning about 7%. At the time, I believed that Intel should have acquired both Broadcom and Qualcomm. Unfortunately, I couldn’t gather any support for this move, and frankly, I didn’t push very hard for it. By then, I had come to realize that getting support for expanding beyond the PC was unlikely to succeed. The PC under Grove had become our prison. Intel was indeed inside. We eventually sold our shares in Broadcom and made a great gain but it was almost meaningless compared to Intel’s earnings at the time. Now 7% of Broadcom is about equal to the value of Intel.

    https://www.cnbc.com/2024/12/31/silicon-valley-turn-of-fortune-intel-worst-year-broadcom-record-gain.html?__source=iosappshare%7Ccom.apple.UIKit.activity.PostToFacebook&fbclid=IwZXh0bgNhZW0CMTEAAR3xpHINXDI9icNbnTwcyloK4z5FCwaMTQ70dVz4KmdglVu7B2rNX1oWvF4_aem_e9Ba4fwvXKVH2g4TDqH2Xw

  • Intel Must be Saved

    I write often about Intel and in particular is spectacular rise and fall.  I have explained that Intel under the leadership of Andy Grove, recognized  the opportunity of the Personal  Computer and brilliantly exploited it.  That as act two for Intel which had originally focused on memory devices. The PC opportunity in which Intel played not initial role in its creation came along just in time to save the company for bankruptcy or a sale to the Japanese (Grove once confided in me that this was something he saw as a possibility).  But Intel missed act three, mobile computing which created the opportunity for TSMC (Taiwan Semiconductor Manufacturing) to become the leading manufacture of semiconductors and to over take Intel in terms of technology in starting in 2017 and asserting a clear leadership position by 2020.

    Intel was/is a vertically integrated semiconductor company meaning that it both designs and manufacture its chips.  Companies like Apple and Nvidia (and many more), design chips but then utilize TSCM to manufacture them.  Apple made the decision to move the manufacturing of the processor for the iPhone to TSCM in 2014.  Steve Jobs, the CEO of Apple, approached Paul Otellini  the then CEO of Intel in 2005 about providing the processor for the yet to be designed iPhone.  Otellini famously turned Jobs down because he did not see the potential of the smart phone and was not interested in having a low margin business while Intel factories were operating at full capacity. Apple turned to Samsung.  The iPhone was introduced in 2007. In 2014, Apple moved to TMSC. Apple is TMSC largest customer, accounting for 20-25% of sales, followed by Nvidia and AMD.   Companies like Amazon, Google and Microsoft design their own chips and then have them made by founders like TSMC.   They probably represent about 20% of the semi conductor demand.  The equipment used by TSMC and other foundries is made by a number of companies with the leader being the Dutch company, ASML which has about 25% of the world market.

    When I joined Intel in 1984, the company was vertically integrated. It developed its own manufacturing capabilities and designed it own chips.  In 2000 for instance, half of Intel’s engineers were involved in manufacturing technology. The manufacturing technology group was called TMG.  It was initially led by Craig Barrett who become Intel’s COO in 1990 and succeeding Andy Grove as CEO in 1998.  He became board chair in 2005.

    It was Barretts appointment to CEO the cemented my decision to leave Intel which I did in April of 1999.  Intel was very insular during my time there (1984-1999).  Of the 33 Corp officers listed in the 1998 Annual Report, I was the last to have joined, 14 years earlier.   Andy, and I often spared about strategy.  I regretted my inability to have much impact on his thinking.  All of this is covered in my book, The Flight of a Wild Duck.  

    During my last years at Intel, I often had debates with Andy about the future of the PC industry.  At that time, I was leading Intel’s efforts to create residential broadband as well leading the consumer investments of Intel Capital.  Andy, realized that Intel needed to expand the companies business into other areas because the PC but was incapable of making that happen.  He thought that Barrett would be the one to do that but alas that was not the case. I use to say that Andy wanted the same old ideas from the same old people and the Barrett wanted new ideas from the same old people.  The was very clear when he took Gerry Parker the then leader of TMG and made him head of new business development even though Gerry never ran a business in his life.  The result of billions of dollars wasted in new business development and a reduction in leadership of TMG which proved deadly.  By the way, I offer Gerry my help in his new role but he declined.

    It is amazing to me that Grove who wrote a brilliant book, “Only the Paranoid Survey” in which he explained how the computer industry went from vertical integration with companies like IBM and Digital Equipment where companies had proprietary hardware and software as well as there own peripherals and service organization, to the PC world where different companies produced the hardware, peripherals, software and services.  What happened to Intel was describe  by Clayton Christensen in 1997 in his very impactful book, The Innovators Dilemma. Andy was well aware of the concept as we had Christensen teach a class to the executives and advise the company. This book explains a great deal about what happened to Intel and so many other companies.  It is hard for successful companies to reinvent themselves.  They cling to their success protecting business that generate high profits.  Talent manager seek to run the successful businesses rather than take risk to run new ventures.  And those that want the new ventures often leave to start their own successful business.  

    The story of Intel would just be another example if it was not for the strategic importance of having USA domestic leader in chip development.

    During my time at Intel. the PC boom drove Intel’s volume.  While the X86 architecture was not ideal, intel’s ability to push performance by outstanding semiconductor process development, allow the company to monopolize the PC industry.  

    What went wrong

    I blame Intel’s board, When I first joined Intel in 1984, the company had an amazing board. but it was a board that change under Grove’s chairmanship.  It became focused on governance and financial issues. Few on the board understood the semiconductor business and the importance of investing in the process technology.  After Andy’s chairmanship (1997-2005), Barrett become the chairman (2005-2009).  You would have thought he knew better but he did not actually have a good relationship with the other board members. He was succeeded by Jane Shaw (2009-2012) a health care executive, then Andy Bryant (2012-2020) the former CFO of Intel.  Bryant is in my opinion bares the most responsibly for the decline of Intel.   After Bryant (came Omar Ishrak (2020-2023) of Medtronic, another health care executive and finally Frank Yeary (2023-Present)  and investment banker.  

    Stock Buybacks

    One of the unforgivable acts of the board was supporting stock buybacks.  Intel used $108 billion dollars to by back its own shares as an average price of $45 dollars.   This is more than the company is currently worth.  Part of the downward  pressure on the stock results from concerns that the company does not have enough capital to pull of it strategy having a major boundary business.  

    After Grove left as CEO, their was a succession of CEOs, each worse than the previous.  One of the major responsibilities if not the main responsibility of a board is to appoint the right CEO.  Intel’s board failed spectacularly in this regard.

    . 1. Craig Barrett (1998–2005)

    2. Paul Otellini (2005–2013)

    3. Brian Krzanich (2013–2018)

    4. Robert Swan (2019–2021)

    Then there was Pat Gelsinger (2001-2004)

    Pat first joined Intel at the age of 18 in 1979.  I meet him soon after I joined Intel in 1984.  I remember being impressed by his energy.  He became one of Grove’s “fair hair boys”.  Since I was not really that involve with the microprocessor development, I did not have much to do with Pat until Pat was appointed by Andy to lead the failed video conferencing product,  Pro Share project. It was a poorly conceived but it was one of Andy’s failed to create to create new applications for PC market. Andy tapped Pat to run that project although Pat had no qualifications.  At that time, I was driving Intel initiative to create residential broadband.  I knew a great deal about communications and new that ISDN and working with the phone companies would led to a disaster but neither Pat nor Andy would listen.  Pat left Intel in 2009 to join EMC Corp as President and COO.  I believe that Pat was push out by Otellini, the CEO.  I was no longer at Intel and have no direct knowledge other than hearsay.  

    In many ways, Pat was a great choice to try to retrieve Intel.  But right away, I began having concerns.  One of Pat’s first pronouncements about his joining was to say “Intel is back.”  He kind of had a messianic tone to his speeches.  He like to liken himself and his return to Steve Jobs.  But Gelsinger was no Steve Job.

    Never the less, I think he did have a strategy for the company.  Pat recognized that need for there to be a foundry based in the USA to compete with TSMC especially given the geo political issues between Taiwan and China.  But building a boundary business is very capital intensive.  Intel would have to match or exceed the abilities to TSMC.  That would take years and billions of dollars. There problem is that Intel is a public company and investor in such companies are very short term oriented. 

    On Dec 2nd, Gelsinger abruptly resigned.  It is not really clear what happened.  Clearly there was a major disagreement about direction at the board meeting.  Over time, we are likely to learn more.  

    What will happen now

    I think there are a few scenarios.  The best would be for Intel to be taken private, perhaps by a consortium led by Michael Dell (Dell Computer) which would bring Pat back to lead this effort. 

    Otherwise, I think Intel will be sliced and diced and cease to exist as an independent company.   I hope that does not happen.  The USA and the world needs a vibrant Intel.  Intel is the only USA company that can build a capability similar to TSMC.  

  • Intel, Qualcomm, and Me

    In early 1991, I first met with Qualcomm.CMDA technology. Irwin Jacob (CEO) and his co-founder, Andy Viterbi , attended the meeting. Paul Jacob, the son of Irwin, who later became CEO in 2005, was there as well. I was introduced to them via General Instruments. Their main business then was Omnitracs system, a satellite-based communication and tracking system designed for the transportation industry. However, they were far along in developing CDMA technology.

    At this time, cell phones used analog technology.  Both GSM and CMDA were under development. I think they were introduced commercially around 1995.  I knew nothing about cell phone technology but was pleased to get a comprehensive tutorial. I was fascinated by the technology.  I did not know about the role of the actress Hedy Lamarr* in the development of spread spectrum technology, which was the core technology used by CMDA. Qualcomm had also acquired Eudora, an email client, and Paul was running that part of the business for reasons I no longer understand. 

    The potential of CDMA blew me away. I realized it could be used to support packet networks.  I was beginning to understand the potential of the cell phone to become a computer, but frankly, it took me until 1999 to truly embrace that idea. This was a bit before the formation of Intel Capital by Les Vadasz and me.  I was reporting to Les as VP of business development and was primarily focused on acquiring network technologies for Intel. However, when I started to explore acquiring or investing in Qualcomm, it was clear from the reaction of various executives that Intel had no interest in mobile technologies. At that time, the focus was still on the desktop not even notebook computers.

    The good news for me was that since we had no interest in Qualcomm, I was cleared to invest in the company directly, and I bought shares in the IPO.  I wish I still had them.  The company was valued at about $210 million at the IPO. Now, it is worth $188 billion. 

    Later, perhaps around 2010, I proposed to some of the Intel board members with whom I was still in contact to explore merging with Qualcomm and making Paul Jacobs, its CEO, the CEO of the combined company.  That and all the other advice I offered to the board after I left Intel was ignored.  Now, Qualcomm is exploring acquiring Intel. Frankly, I don’t think it makes a lot of sense. It would be tough to digest.  

    By 1992, I realized that Intel was not capable of acquiring anything meaningful when I first proposed acquiring Cisco, and Andy Grove said the company was too expensive when I looked at that in 1990) and then 3COM, which was too crappy.  I said, “I get it.  We can’t afford anything we like and don’t like anything we can afford.”  More importantly, Intel’s immune system would have attacked the foreign body and destroyed it.  That drove me to look at early-stage investment instead of acquisitions. Intel would have destroyed Qualcomm if it had acquired it. Now Qualcomm may acquire Intel.

    *Hedy Lamarr played a significant role in developing technology that would eventually contribute to modern wireless communications. Alongside composer George Antheil, she co-invented an early version of frequency hopping spread spectrum technology during World War II. This technology was initially designed to prevent the jamming of radio-controlled torpedoes. Though not implemented in wartime, the principles of their invention have been incorporated into modern technologies, including CDMA and Wi-Fi, demonstrating a foundational contribution to secure wireless communication methods.

  • Intel’s dominance of the PC Microprocessor business

    I have written about my concept for understanding businesses, which I call Oyster for Opportunity, Strategy, Execution, and Reward.  

    Recently, I have been discussing with someone from a company I advise. I was asked to see if I had any materials from the past, for instance, from my time at Intel, that dealt with strategy. Sadly, I do not. I did not keep any of the materials I had from Intel when I left. I honored my confidentiality agreement. But the request made me think back on the strategy that Intel brilliantly executed to be one of the dominant players in the PC business during the 90s, and I thought I would relate that here.

    I joined Intel in 1984, and while I was not directly initially involved in the PC business, I was senior enough in the company’s management. I participated in the overall strategy discussions of the company.  

    Intel was slow to recognize that the development of the PC business that resulted from the launch of the IBM PC in 1981 would transform the computer industry. Personal computing had not even made the list of the top applications for the 386 processor. But that changed as the sales of personal computers climbed. In my book, The Flight of a Wild Duck, I give Compaq Computer credit for that. Later, as Vice President of Business Development and especially after co-founding Intel Capital, I got very involved with the personal computer market.

    Opportunity: Become the dominant supplier of microprocessors for the PC industry

    Intel eventually recognized the opportunity to become the dominant supplier of microprocessors to the emerging PC market. Before that, Intel sold microprocessors into various markets, like military, telecommunications, etc. The market microprocessors were not used in general computing, with few exceptions like terminal devices. Andy Grove, the CEO, came to recognize the strategic opportunity that the PC presented. I was fortunate to witness his growing awareness.  

    To take advantage of an opportunity, you must first recognize and embrace it. Then, you must develop a strategy that you must execute almost flawlessly. That is what Intel did.

    Strategy for dominating

    Become the sole source provider of high-end microprocessors for the PC market.

    Semiconductor Companies had little market power. Vendors were unwilling to have sole source parts, so they required companies to license their products to other manufacturers. For instance, Intel licensed AMD, thus creating their competitor. Not only did second and third-source suppliers give additional confidence to customs, but it kept the prices down. Intel had to stop this practice. They were only in a position to do this because the dominant operating system, PC DOS from Microsoft, only ran on Intel and compatible processors. Microsoft had little incentive to spend money porting their OS to a different architecture. IBM eventually tried to make an end run but failed (another very long story).  

    Move customers to 32 bits

    Intel had to get customers to move to 32-bit processors as it had widely licensed the 286 to other companies, including IBM. IBM also had a license for the 386, but they gave this up in return for Intel agreeing that they could manufacture more 286s for their own use. Although iIntel was the dominant supplier of the 16-bit 286 processor, they ran an advertising campaign against it. IBM, the leading supplier of PCs, would not move to the 386 because they were concerned that the additional processing power would allow PCs to compete with their other and more costly computers. So Intel provided Compaq Computer with incentives.

    Get control of the brand

    Intel processors had numbers as their brand, such as 286, 386, and 486. The court had ruled that these numbers could not be copyrighted. So, Intel developed a brand name they could control, Pentium. 

    Take over the R&D for PC development.

    PC manufacturers each had a lot of competitors and little product engineering capabilities. In order to keep the PC’s increasing capabilities, Intel set up the Intel Architecture Labs and did the engineering for the industry. They would provide reference designs, which created even more PC manufacturers, especially Asian manufacturers. More and more of the value of the PC became associated with Intel and Microsoft.  

    Push consumers to want high performance.

    Intel used its relationship with software companies and the Intel Architecture Labs to develop capabilities that required higher-performance processors. An excellent example of that was multi-media.

    Create an ingredient brand, Intel Inside

    intel decided to become an ingredient brand (kind of like Dolby or NutraSweet) and launched the Intel Inside program. Intel provided marketing dollars to PC companies that used this program, which, in effect, lowered their price and made it not competitive to offer PCs without the Intel Inside logo.  

    Utilize massive volume to support the most advanced manufacturing

    The intel architecture had a lot of baggage. Newer processes using RISC architecture could improve performance for the same transistors. However, Intel’s advanced manufacturing allowed Intel to be a generation ahead.  

    What went wrong

    Two things impacted Intel’s ability to continue with these strategies. The first was the internet, which pushed much of the computing to the cloud. The second was the advent of smartphones and other non-pc devices. People wanted the freedom of mobile computing. In a tremendous strategic error past on having a vital role in the smartphone market, Intel turned down Apple’s request that they manufacture the chips for its phone. Eventually, Intel failed to stay ahead in semiconductor manufacturing.

  • Ethernet at 50, an Important Through Line in my Career

    We are celebrating the 50th anniversary of Ethernet. Bob Metcalfe is considered the inventor of Ethernet, which happened at Xerox Research Center in Palo Alto in the 70s. It was there that Metcalfe wrote a memo describing Ethernet. At that time, many competing technologies intended to connect computers in the same physical space. The concept was called Local Area Network or LAN. 

    The birth of a Standard

    Metcalfe wanted to make Ethernet an industry standard and knew he must involve other companies. So, around 1980, he sought out Gordon Bell, the head of engineering at Digital Equipment Corporation, which was the second largest computer company after IBM. Gordon thought it was a great idea, and then these two companies brought Intel into the mix. The three companies collaborated to create an industry standard a few years later. In the meant time, Metcalfe left Xerox to start a network company called 3Com which would make ethernet products for the personal computer industry.  

    Interestingly, neither Xerox, Digital Equipment, nor Intel benefited directly through selling ethernet products. Still, of course, LANs played a significant role in the growth of personal computers, and of these three, Intel was the primary beneficiary. 

    First Ethernet Products

    I got involved 1981 when I was leading Digital’s efforts to develop a personal computer focused on knowledge workers called the Professional 350. Gordon Bell, who at that time was more or less my boss, asked me to add Ethernet as a capability. We did not build it but added a special connector to the packaging. We contracted with 3Com to provide us with ethernet cards. I believe this was the first significant order they got, but Metcalfe never mentioned it and chose to focus on delivering add-in cards for the IBM PC, but that came later.

    The initial design of Ethernet used a coaxial cable which was, for some reason, yellow. You used a clamp to hold and penetrate it if you wanted to connect to it. One day, Ken Olsen, Digital Equipment Corp.’s founder and CEO, walked into Gordon’s office when he and I met. Ken held the yellow coax cable in one hand and some telephone wires in the other, saying, “Maybe your university friends want this yellow cable, but my friends want telephone cables. Gordon got angry and told Ken that he could probably get a job as an engineer at Data General (Digital’s main competitor at that time) to develop that idea. Ken turned out to be correct.

    Sadly, the Professional 350 was not a commercial success and did not impact the development of the personal computer industry or local area networking.

    In 1984, I joined Intel as Director of Business Development and was promoted to Vice President a few years later. I started what became Intel Capital in 1988, although we marked the official start as 1991 when Les Vadasz, my boss, and I established Intel Capital.

    Intel Enters the Ethernet Board Business

    Intel had a division called PCEO which sold PC enhancement products. Around 1989, they wanted to sell ethernet boards retail. I strongly believe in the importance of networking and put my weight behind it. Unfortunately, Intel did not have a competitive ethernet chip offering. So we went to an early-stage company called Broadcom and made a significant investment. PCEO began selling ethernet cards for the PC and directly competed with 3COM.  

    At the same time, I was looking to get into the networking business and had gotten the Intel board to support this idea. I brought the idea of acquiring Cisco to Andy Grove, the CEO. At approximately $100 million, Andy told me it was too expensive. Then I considered 3COM, which would have been a lot cheaper. Andy said that the company was a pile of crap. I responded, “I get it. We can’t afford anything we would want, and we don’t want anything we can afford.”

    Intel Capital Invests in Networking Companies

    Instead, I started making minority investments in early-stage networking companies. One of these was Kalpana Networks which made an ethernet switch. It was acquired a few years later by Cisco.

    We increased our investment in Broadcom. By that time, I was leading Intel’s broadband efforts in developing cable modems and ADSL for the telephone network.  

    Residential Broadband and Home Networking

    In 1992, I started working on using the cable infrastructure to connect home personal computers to the internet. Broadcom and General Instruments were developing chips for digital television at that time. One chip did video decompression, and the other handled the networking. Looking at the Broadcom product, I recognized it, too, was a packet network similar to Ethernet. So, we developed a cable modem demonstrated in 1993 at a major cable industry conference. Eventually, the Cable Industry would develop DOCSIS, the cable modem standard incorporating much of our earlier work. The first cable modems were external and connected to personal computers via Ethernet, which was the only connection that was fast enough at that time. Later USB would be used for this purpose. Eventually, one computer per home was insufficient, so we began to see the development of home LANs. At first, these used ethernet cables, but ultimately, Wifi was developed and became the primary way computers and other devices communicated in the home.

    Ethernet a great Success Story

    Ethernet is a great success story and shows the power of standard. It has been able to evolve over the years from 10 mbits/sec to 10Gbps for instance.

    There is a lot more about all this in my book, The Flight of a Wild Duck.

  • Gordon Moore has passed

    (January 3, 1929 – March 24, 2023)

    Gordon Moore, a founder of Intel and best known for Moore’s law, has left us. In 1965 in an article in Electronics Magazine, Gordon predicted that the number of transistors would double every two years. Five years later, Carver Mead coined the term “Moore’s law” to describe this phenomenon, known by this term ever since. Of course, it is not a law, but it was a very astute observation.  

    Gordon was a semiconductor pioneer, starting in Shockley Semiconductor Laboratory in 1956. Then in 1957, along with Bob Noyce, they started Fairchild Semiconductor, the company that created the Silicon Valley Semiconductor Industry. It was there that he hired Andy Grove. In 1968, Noyce and Moore founded Intel. Andy Grove was amongst the first employees, as was my mentor, former boss, and close friend, Les Vadasz. 

    Noyce, Moore, and Grove embodied the three elements that I believe are necessary for sustained success; vision, strategy, and execution. Bob was the visionary, Gordon was the strategist, and Andy was the implementer. I had the privilege of knowing all three of them. When I joined Intel in 1984, the senior executives would teach management courses. So I got the opportunity to study with Gordon.  

    I first met him during my interview at Intel in the summer of 1984. Both Gordon and Andy had to sign off on my hiring. He was the CEO at that time, and Grove was the COO. Noyce was the board’s chairman, Moore was CEO from 1975 to 1987 when Grove took on that role, and Moore became Board Chair. 

     I joined Intel in 1984 and had a chance to interact with Gordon often. I consider myself very fortunate to have had that experience. He was mild-mannered but incredibly thoughtful, with a subtle sense of humor. In 1975, Intel acquired Microma, a Swiss digital watch company. Intel did not realize that watches were fashion items rather than technology devices. Intel eventually lost millions. Gordon was still wearing a Microma watch, and whenever someone would propose doing something outside the company’s business and technical expertise, Gordon would remove the watch and put it on the table. He did not have to say anything more.

    Gordon was a modest man who valued family. In 2000, he and his wife, Betty, created the Moore Foundation, a major nonprofit.  

    While there are many significant founders of technology companies, Gordon was unique, in my experience, never letting his success and notoriety feed his ego.

    Moore’s most consequential decision, along with Grove, was in 1985 to exit the dynamic RAM business, the company’s founding business. Moore and Grove realized that the competition with Japan would eventually make Intel no longer a viable enterprise. They decided to focus all the nascent microprocessor market. It was not yet clear that the personal computer market would grow into the largest segment of the computer industry nor that intel would be able to be the dominant microprocessor supplier. The decision to exit the memory business resulted in massive layoffs. It was an excruciating decision and a problematic execution, but it resulted in Intel becoming one of the world’s most valuable companies by 2000.

    May his memory be a blessing.

  • Fun interview that may get me into trouble

    Over the last month, I have been doing many interviews to help promote my book, The Flight of a Wild Duck, published on September 1st.  One of my favorite interviews was . It is long but lots of fun. Most of my interviews have been enjoyable, but this one has a super amount of energy due to the host’s personality, Christopher Lochhead.  I do hope you enjoy listening to it here.

    However, I said one thing that would probably get me into “trouble” with some people. I said that I did not think that Andy Grove was a great CEO. I explained why in detail. First of all, I believe that Andy Grove was a great man. I had the fortune to know him rather well. He was remarkable in so many ways. So much has been written about Andy, the man, so that I won’t repeat that here. But Andy failed at succession. I think that several attributes go into making a great CEO, and that is one. He should never have supported Craig Barrett as his successor. Barrett was a great Chief Operating Office but was not the strategic thinker and leader needed as Intel was about to enter into a significant discontinuity driven by the internet. Andy was one of the most outstanding CEOs when it came to execution, but he struggled with a vision about the future. My book goes into that in detail. Yes, under Andy’s watch, Intel grew to become one of the most valuable companies in the world, but then looked at what happened in the next twenty years.  

    I also said that I thought Jeff Bezos and Steve Jobs were great CEOs and gave my reasons. But I also said that I did not care for them as people. I wish there were a high correlation between being a great person and a great CEO, but it does not appear that there is.  

    Andy is so revered that I expect to get a lot of flack for what I said about him. But knowing Andy, I think if he was around now and could look back, he might agree with me.

  • IBM PC 40th Anniversary

    My book The Flight of a Wild Duck, will be published on September 1st. Pre Orders can be placed now on Amazon. There were several sections of the book which did not make it through the final editing primarily because they broke the flow of the book. One of them was about the evolution of the IBM compatible PC business. I thought that since it is the 40th anniversary of the announcement of the PC by IBM, I would publish that section of the book here on my blog. I will be publishing this and other essays on the books website .

    The IBM PC turns the computer industry on its side.

    Although I contributed in only a limited way to the early development of the Personal Computer (PC) industry, I do have a unique perspective resulting from my work at Digital Equipment Corporation, my time as President of Franklin Computer, and, most importantly, my role as Vice President of Business Development for Intel. The story of the IBM PC offers so many valuable lessons. The most of important of these is this: listen to the market.

    In 1964, when IBM introduced the System/360 line of mainframe computers, it was primarily a tabulation and typewriter company. This “bet-the-company decision” sure paid off. In just a few years, IBM became the leading computer company in the world, capturing more than 70% of computer-industry revenues. Strangely, a company that made its fortune by developing a line of compatible computers at different price points, all running the same software, would end up damaged by that very same phenomenon of software compatibility.

    The story of the IBM PC is not primarily about hardware. It is a story about software, as well as unintended consequences, hubris, and greed. Nobody at IBM imagined that their own actions would transform the computer industry in such a way as to significantly diminish their leadership role and even put the company’s existence in peril. Nobody at IBM could imagine that many small companies would form, each taking a bite out of IBM, let alone that among these thousands of piranhas would be the likes of Bill Gates and Andy Grove.

    Sometime in 1980, the top management of IBM, watching Apple Computer’s growth, concluded that IBM should enter the nascent PC market. Apple had transitioned from serving a hobby market into building a productivity tool, driven by business applications like VisiCalc. If the PC was to create a new market, IBM management wanted to dominate it. Atari, then the leader in computer gaming and a subsidiary of Warner Communications, had contacted John Opel, IBM’s president, with an offer to develop a PC for IBM to serve the business market. Frank Cary, IBM’s CEO, asked Bill Lowe, the General Manager of its Entry-Level Systems Division in Boca Raton, to evaluate this possibility. A few months later, Lowe presented his review to the IBM management committee. He recommended that IBM acquire Atari from Warner and use a repackaged version of the Atari 800 computer as a starting point for IBM’s entry to the PC market. He even demonstrated to the committee a modified Atari 800, which had been brought to market a year earlier and was doing well. My good friend, Steve Mayer, one of the founders of Atari, had been the lead developer of the 800. This computer was designed for entertainment and games, so why Lowe thought it could serve IBM’s needs is a mystery to me. Perhaps he thought IBM could never develop a competitive PC in time to enter the market and so at least wanted to take the available opportunity. Or perhaps he cleverly manipulated the committee to give him the authority to move forward outside of the normal IBM processes.

    The IBM executives wisely rejected Lowe’s Atari proposal. However, they understood the challenges of creating new products within the IBM culture. Developing a new computer at IBM could take five years or more, as IBM’s cultural focus on quality impacted both design and manufacturing. Indeed, Lowe’s team had already spent almost four years developing the IBM  DataMaster. 

    IBM had numerous committees and procedures. Anyone could say “no,” and no one could say “yes.” To counter this, Cary had already begun to encourage the creation of small autonomous units—“Independent Business Units (IBUs)”—to counter IBM’s sluggishness. He asked Lowe to form an IBU to develop a PC. Lowe returned to the Management Committee on August 8, 1980 with a plan to set up a small team to develop the IBM PC. Don Estridge, who had been the Assistant General Manager of Entry-Level Systems, became the head of the newly formed PC team, which also included marketing and sales. Lowe committed to bringing the IBM PC to market in an astounding one year. Therefore, he explained that his team would have to go outside of IBM for most of the critical components, including the microprocessor and the operating system. The Management Committee approved this plan. 

    One year later, on August 12, 1981, the IBM model 5150—the IBM PC—was launched during a splashy press conference at the Waldorf Astoria in New York City. Its price tag was $1,565 (about $4,400 today). No one at IBM or anywhere else understood that the computer industry had just been turned on its side. IBM had launched a near-fatal blow to its own business, creating a virus that would almost kill IBM and that would prove a mortal blow to most of the other existing computer companies. Yet neither the losers nor the winners knew at this point what was about to happen.

    Coincidently, around the same time as Bill Lowe presented to the IBM Management Committee in August 1980, I was presenting my plans for the Professional Series PC to the Management Committee of Digital Equipment Corporation (Operations Committee), the second-largest computer company in the world. The Professional represented Digital’s initial attempt to address the Personal Computer market by offering a proprietary system that was compatible with Digital’s line of computers ecosystem. While the IBM PC Group primarily bought off-the-shelf components, under my leadership, Digital designed almost everything from scratch. The Professional would not ship until mid-1983, by which time IBM and manufacturers of IBM-compatible computers would be well-entrenched in the market.  Interestingly, ultimately both Digital Equipment and IBM would not succeed in the transition to personal computers.  The leadership would pass to Microsoft and Intel in the most remarkable way.

    In order to meet the one-year product shipping deadline, the IBM PC team used existing hardware components from other companies. Importantly, this included the microprocessor: the Intel 8088. IBM also licensed the computer’s operating system from Microsoft. The decision to go outside IBM for most of the PC’s hardware and software was probably the most consequential decision taken to date concerning the development of the computer industry. But the decision’s impact was not understood by anyone at the time, certainly not by IBM, and certainly not by Apple, at the time the leading PC company. On the day of the IBM announcement, Apple ran a full-page ad in the Wall Street Journal headlined, “Welcome, IBM. Seriously,” with the touch of arrogance only Steve Jobs could supply. At this time, Apple had about 20% of the PC market. Their share would drop below 4% just a few years later. They mistakenly thought they would be competing only with IBM.

    Project Chess

    The PC unit’s code name was “Project Chess,” and the first computer was called “Acorn.” Strangely, Bill Lowe was promoted right in the middle of the PC’s development, and Don Estridge, his number two, was now placed entirely in charge. Don was a wonderful man who died at 48, far too early, in a 1985 plane crash. I met him at a few industry events, including the PC Forum in 1982, and I liked him. We spoke in April 1983, just after I hired two key members of the original IBM PC development team to join me at Franklin Computer: Bill Sydnes, the development leader, and Lew Eggebrecht, the architect. I called Don to reassure him that I would make sure Franklin got no proprietary IBM information from either Bill or Lew. Don shared with me that when IBM was developing the PC, they knew of my work on the Professional Series at Digital. He said our project was the only one IBM considered competitive. Digital, the second-largest computer company in the world, dominated the minicomputer market in the same way as IBM dominated mainframes. It’s easy to imagine that IBM thought the competition would be other major computer companies like Digital, not startups like Compaq building IBM-compatible PCs.

    The power of small teams

    Even after all these years and with the opportunity to  have worked closely with Bill Sydnes, I still can’t figure out how IBM got their PC done in just one year. The team was just 13 individuals, and that included marketing, licensing, and software people. But the power of small teams should not be underestimated. Yes, they used off-the-shelf components and subsystems, but these were many, and they required integrated. 

    On the other hand, I had hundreds of people working on the Professional at Digital and spent three years developing an unsuccessful product. The IBM team traded off functionality and quality in favor of time; the one-year deadline was held absolutely constant. At Digital, we instead favored functionality and quality. We failed to understand what Adam Osborne, the founder of Osborne Computers, meant when he spoke of being “adequate.”

    Many years after the introduction of the IBM PC, Andy Grove described the change from a vertical to horizontal computer industry in his 1995 book, Only the Paranoid Survive. He reflected on this change in the context of what he termed “a strategic inflection point”:

    “[A] strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.”

    The structural change in the computer industry from vertical to horizontal integration would take more than a decade; throughout the 1980s, the computer industry remained dominated by mainframes and minicomputers. The transition would only become clear to everyone much later.  I think Andy thought the change would be permanent, but it did not hold through the ascendance of mobile computing devices, such as the iPhone.

    Can’t put the genie back into the bottle

    Compaq was the first to throw a sword into the body of IBM by designing a fully compatible computer.  It was followed by tens of other companies.  IBM never imagined that other companies could develop a fully compatible PC without infringing on their BIOS copyright, nor could they believe that such companies could succeed even with a non-infringing BIOS. In 1984, Lance Hansche, a senior executive at Phoenix Computers, discovered a failed clone company in Texas that had successfully developed a non-infringing BIOS. Phoenix acquired the BIOS and also made changes to MS-DOS, like Compaq did, offering full IBM PC compatibility to the many companies that wanted to offer clones without going through the expense and time needed to develop a legal BIOS. Phoenix’s many customers included Hewlett-Packard, AT&T, Tandy, Gateway, and Dell. Now that any company could develop a fully IBM PC compatible computer, many did. By 1986, clone manufacturers had more sales of IBM-compatible PCs than IBM.

    In 1984, IBM launched the IBM AT.  This was perhaps the most consequential event in creating the PC industry. The AT utilized the Intel 286 processor which was backward compatible with the 8088 that IBM used in its original PC. This solidified the importance of software compatibility and unknowingly, IBM handed the keys to the PC Kingdom to Intel and Microsoft.

    IBM, soon enough realizing that they could not compete with the clone manufacturers who had a much lower cost structure, decided to develop a proprietary system, called the PS/2, with a proprietary operating system, called OS/2, and a new bus structure, called Micro Channel. They also used their proprietary networking technology, Token Ring. The PS/2 finally launched in 1987, and they paid Microsoft to help them develop it. As silly as it may sound now, IBM paid Microsoft per line of code. So, of course, OS/2 was bloated, although it was probably technically rather strong.

    At the same time, Microsoft was developing Windows. Gates tried to convince IBM to use Windows and abandon the development of OS/2. IBM did not agree and soon found itself dependent on what would soon be a competitor in the operating system business. The Power PC microprocessor, which was being developed together with Motorola and Apple.IBM based the PS/2 on the Intel 286 chip. Intel was counting on the 386 to be a big success and tried to convince IBM to use it. 

    IBM thought they could put the genie back in the bottle. PS/2 would be a success, and clone manufacturers would have to license technology from IBM. The resulting licensing fees would increase prices and provide IBM with the margins they needed to be profitable in the PC business. 

    IBM strongly resisted using the Intel 386, the first 32-bit microprocessor that was compatible with the earlier x86 processors. They had several reasons for their resistance, including their concerns that a more powerful, 32-bit PC could compete with their minicomputers. IBM was also probably exploring the development of their own 32-bit microprocessor, since they eventually developed the PowerPC in cooperation with Motorola and Apple. In an interview with PC Magazine from March 25, 1997, Bill Gates stated that IBM was concerned that Intel was not capable of getting the 386 done. I’m not sure if that was really IBM’s view or just an excuse they gave Bill.

    I’m still amazed that IBM thought they could succeed with this strategy. Perhaps if the PS/2 was vastly superior to the PC clone products, they might have had a chance. But it wasn’t. It would have been much better for IBM to exit the PC business sooner—as they eventually did—to specialize on integrating PCs into the corporate world. After Asian PC companies entered the market, they drove prices down to the point that IBM had no choice to exited the PC market altogether in 2004, selling their PC business to Lenovo, a Chinese company.

    Not having IBMs support for the 386 put Intel in a quandary. Intel decided to do everything they could to get Compaq to bring out a desktop PC using the 386, leapfrogging IBM. At one meeting at Intel I attended, someone said Compaq would be the rabbit that the dog (IBM) would chase. Once Compaq came out with a 386-based PC, the rest of the clone industry followed. Around this time, Dick Boucher, an Intel Vice President and my officemate, discussed the IBM situation with me. IBM had a license to manufacture a certain percentage of the 286 chips they were using. As Dick was the senior executive dealing with IBM, IBM had asked Dick if Intel would agree to let IBM manufacture more units, since they had unused capacity at their factory. IBM had negotiated rights to manufacture a portion of all future processors in the x86 family, including the 386. I suggested to Dick that Intel agree to let IBM build more 286 chips if they gave up the rights to the 386 and future x86 processors. IBM agreed,

    IBM found themselves in a difficult spot. The clone manufacturers did not move to IBM’s proprietary technologies. IBM could not compete with the clone manufacturers, nor could they get the industry to move to any of their proprietary technology. IBM never brought the PowerPC to the desktop market successfully, though Apple did use the microprocessor for its Macintosh computers starting in 1994. The PC market that looked so good to IBM in the early 1980s was now a rock tied around their necks in a sea of clones and they were drowning. 

    The American clone companies were not immune to the pressures of Asian competitors, either. Intel was very active in developing low-cost PC manufacturers in Asia who were willing to accept low margins. It served both Intel and Microsoft well to have many PC manufacturers, none with any market power. Effectively, the PC manufacturers became distributors for Intel and Microsoft products. Microsoft, in fact, could sell their products directly to end users, bypassing the PC manufacturers entirely, and even began to sell hardware peripherals like mice and keyboards, as well as application software like Microsoft Office. Access to end users was a very important advantage for Microsoft, one which Intel did not have. Intel’s lack of such access is probably one of the reasons that Microsoft is worth so much more than Intel today.


    Bring in the Clones

    Compaq Figures It Out

    Many think that Microsoft and Intel created the PC revolution, but Compaq actually initially set the course. When the IBM PC was introduced, Intel and Microsoft were both concerned about very different things besides the PC. Intel was worried that its x86 architecture was uncompetitive and would soon lose out to the various RISC processors being developed by competitors like Motorola and National Semiconductor. And so Intel embarked on its ambitious plan to develop the 32-bit i432. Microsoft, meanwhile, was working on a operating system, Xenix, which was based on Unix. 

    Compaq was founded by three engineers working at Texas Instruments: Rod Canion, Jim Harris, and Bill Murto. Canion documented the story of Compaq in a 2013 book, Open: How Compaq Ended IBM’s PC Domination and Helped Invent Modern Computing. Wanting to leave Texas Instruments and start their own company, Canion, Harris, and Murto explored several ideas, including developing an add-on hard disk for the IBM PC. Eventually, on January 8, 1982, they decided to create a portable version of the IBM PC. A nascent venture capital fund, Sevin Rosen, put together Compaq’s first financing of $1.5 million, alongside the well-known venture firm, Kleiner Perkins. Sevin Rosen had also, importantly, backed the startup Lotus Software, which developed Lotus 1-2-3, the most critical application (a spreadsheet) for the IBM PC. A little over a year later, in 1983, Compaq began shipping their portable computer. They ended that year with an astonishing $111 million in sales.

    In 1982, Ben Rosen, who became the Chairman of Compaq’s Board, still owned the PC Forum, the most important industry conference when I attended with the Digital Equipment team to announce its three personal computers (the Professional, Rainbow, and DecMate II). I flew on Digital’s Learjet to get to the conference in time. A private limousine met me at the airport and took me to the speakers’ dinner, where I met Steve Jobs for the first time. My life had changed.or, at least, so I thought. Just three years earlier, I was living in Israel and developing medical computer systems for a small company. Now I was having dinner with the people who were in the process of restructuring the computer industry.

    At the conference, Ben took me aside to show me the prototype Compaq Portable, which would be released in March 1983. It made little impression on me. I found it difficult to imagine people carrying around this “luggable,” which weighed 28 pounds, looked like a sewing machine, and cost more than $3,000 (more than $7,000 in today’s dollars). I did not understand the coming revolution in the industry, and it would have been incomprehensible had you told me that, less than 20 years later, Compaq would acquire Digital.

    Two initial strategic decisions set Compaq on a course for success. First, and most importantly, their computer was 100% compatible with the IBM PC. That meant that all software developed to run on the IBM PC would run on their system, too. The second, was to offer a portable computer which was a product that IBM did not have. 

    The Apple v. Franklin ruling in August 1983, as I described in Chapter X, made clear that a BIOS could be copyrighted. The BIOS, a small sliver of software, acted as the interface between the operating system and the computer hardware. It was often called firmware, because it did not change and was stored in Read-Only Memory (ROM). Application software was supposed to access hardware through the operating system, not the BIOS directly. Still, application software developers would sometimes reach down into the BIOS to get higher performance from their applications. Once IBM released its PC, many companies began to offer IBM-compatible PCs. Those companies just copied IBM’s BIOS in the same way as Franklin had copied the Apple II BIOS. They therefore infringed on the IBM copyright in the same way as Franklin Computer had infringed on Apple’s. Starting in late 1983, then, after the Apple v. Franklin ruling, IBM used the courts to put them out of business. It was not pretty.

    Compaq, by contrast, understood that they had to develop a fully compatible BIOS that did not infringe on IBM’s. Compaq did so successfully, no easy task. Compaq also had to reengineer Microsoft’s operating system, MS-DOS, so that it was compatible with IBM’s PC DOS. Eventually, Compaq licensed its changes to MS-DOS back to Microsoft, as Microsoft had incorrectly assumed that application software for other personal computers would use its application programming interfaces (APIs) without reaching into the underlying hardware. The BIOS, Microsoft thought, would be unique for every computer manufacturer. As it turned out, that was not what happened. Clone manufacturers would routinely bypass the operating system to improve performance or reduce programs’ size.

    Compaq’s second critical strategic decision was to offer a portable as their initial product. Since IBM had no portable computer, Compaq’s portable provided customers permission and an opportunity, especially at larger corporations, to buy a non-IBM computer that was nevertheless software-compatible with the IBM PC. By the time Compaq was formed, the market had some portable (luggable) computers, like the Osborne I and the Kaypro II, and these were doing well. Compaq believed that the combination of portability and compatibility would be a killer proposition on the market. It was!

    Three Phases of the PC Market
    The PC business evolved over three major phases. Computer hobbyists drove the first phase. The second phase was driven by personal productivity applications, such as word processing and spreadsheets. Widespread adoption of email drove the third phase, in which the PC became a communications device.

    Compaq successfully transitioned from the second to the third phase. By 1995, most of its profits came from servers, not the desktop or notebook computers used by individuals. Intel played a big role in making this happen. Sun Microsystems, which primarily sold workstations, had developed its own proprietary RISC microprocessor, SPARC, which it first brought to market in 1987. It considerably hardened Unix, releasing the result in 1993 as Solaris, which earned considerable share in the server market. Intel had initially wanted to capture this market with the 486 but realized that Microsoft’s version of Unix would not be adequate to accomplish this objective. Linux, an open-source Unix kernel initially developed by a Finnish student, Linus Torvalds, was gaining prominence throughout the 1990s, and the open-source versions of Unix built on top of the Linux kernel were gaining in sophistication. Intel launched a development group focused on making contributions to the Linux source in order to make Linux a viable commercial offering for servers. Along with other companies that took an interest in competing directly with Sun, Intel established a non-profit industry consortium, the Open Source Development Labs (OSDL), to consolidate efforts to contribute to the Linux ecosystem and compete with Sun. Intel eventually developed the Xeon microprocessor with features aimed at servers, particularly servers running Linux. By 2007, Sun had lost 80% of its value and was sold to Oracle in 2010. Sun should have realized they were really a software company and put Solaris on top of an Intel box. In fact, Barry James Folsom, who ran Digital’s Rainbow group, joined Sun in 1985 to develop their Intel-based business. By 1990, though, he was gone. With the exception of Apple, no successful computer company in more than 30 years has developed their own hardware and software.

    By 1997, Compaq believed that they could compete with IBM in the enterprise market with their combined client (PCs) and server offering. IBM was reluctant to offer Intel-based servers, which would directly compete with their mainframes and mini-computers. However, Compaq lacked the direct sales or service channels this strategy would require. Compaq instead depended on a sizable third-party distribution network, and the potential negative reaction of their dealers kept them from building out direct sales (even though Dell had proven the model). Compaq hired Morgan Stanley to help them find a company they could acquire that had strong enterprise sales and service capabilities. A former senior employee of Morgan Stanley, Robert Greenhill, had recently left to form Greenhill & Co. He convinced the Compaq board to terminate their arrangement with Morgan Stanley and let him advise on potential acquisitions.


    One candidate considered was my former employer, Digital Equipment. Digital had fallen on hard times, and Ken Olsen, the founder, was forced out in 1992. The company still had many customers, significant technology, and a lot of service revenue. Alta Vista, which for a short time became the leading Internet search engine, was also part of the deal. Digital also had a compelling next-generation microprocessor architecture, the Alpha, which could have been very powerful in servers. In fact, Digital had all the critical ingredients needed for the next phase of computing, but the company did not know how to organize to take advantage. Nor, for various reasons, did Compaq have any interest in these aspects, missing its chance to lead the next phase of the industry: the Internet.

    Interested only in Digital’s sales and service organization, Compaq found, after acquiring Digital for an industry-record $9.6 billion in 1998, that these capabilities had been grossly overstated. Compaq had not realized how difficult it would be to integrate the two companies. With two very different corporate cultures, the acquisition was a disaster. The right leadership at Compaq might have managed to find a different path, but Eckhard Pfeiffer, CEO from 1991, had little insight into how to manage a technology company. He, himself, did not even know how to use a PC.

    The combined organization lacked the design and manufacturing capabilities—and interest—needed to be successful with the innovative Alpha microprocessor. Just a few years later, in 2002, Compaq itself was acquired by Hewlett-Packard in a very controversial move. Many members of the Hewlett-Packard board were against the acquisition, as they saw correctly that they would be doubling down on a bad business. Carly Fiorina, Hewlett-Packard’s CEO, pushed the acquisition through over their objections, but the board members in opposition turned out to be right. The board fired Fiorina in 2005, just a few years after she bought Compaq. She later ran unsuccessfully for the 2016 Republican nomination for President of the United States.

    One of the Greatest Transfer of Wealth the World Has Ever Seen

    Intel’s Opportunity

    Meanwhile, Intel took on an increasing amount of the hardware system engineering. Intel not only worked diligently to establish industry standards but also created designs they provided directly to PC manufacturers. This reduced the research and development these companies needed to do, which they passed onto their customers in the form of lower prices. (However, this also created a price barrier for PC manufacturers that wanted to do their own engineering.) Intel developed chipsets to simplify PC designs and supplied complete motherboards. They even developed power supply improvements, which they passed onto power supply manufacturers in Asia. Intel also had a very robust software program in which they worked with third-party software developers to take advantage of the new features of their microprocessors. Intel also supported the development of operating systems besides Microsoft’s, such as Linux.

    All of this created tension with the leading PC manufacturers, IBM and Compaq. When Compaq was reluctant to embrace the Pentium in the same way as IBM had been reluctant to embrace the 386, Intel used companies like Dell, Gateway, and Packard Bell as the “rabbits” that would force Compaq to move. 

    The result throughout the 1990s was a very fractured PC market in which all the power resided with Intel and Microsoft. Accordingly, Intel and Microsoft continued to grow and increase their profits. Microsoft’s Gates became a billionaire in 1987 and was the wealthiest man in the world by 1995. Microsoft and Intel were both consistently among the largest five companies in the world by market capitalization towards the end of the 1990s. A common but true joke held that Intel and Microsoft made more than 100% of computer-industry profits at this time because so many others were losing money.

    Intel and IBM

    Intel had become a memory supplier to IBM for several years. IBM decided to use Intel’s 8088 microprocessor for its PC for many reasons: IBM was comfortable with Intel, IBM could build a cheaper system using an eight-bit processor which ran 16-bit code, and, most importantly, Intel had a software development system that ran on the same processor. Writing software for Motorola’s or National Semiconductor’s processors, for instance, required a mainframe computer. IBM hoped to get many third-party developers for their PC, so this was a very important consideration. Lew Eggebrecht, the architect of the IBM PC, made the decision to use the 8088.

    No one at Intel knew about the PC until about halfway through its development cycle. Perhaps if they had, they would have also offered IBM the possibility of licensing the operating system that Intel had developed for the 8088 development systems. There had already been discussions within Intel about entering the software business. Terry Opdendyk, who later became the CEO of VisiCorp, the company that distributed VisiCalc, the first spreadsheet, was running the Development Systems Group at the time. He argued against Intel licensing the operating system they had developed, because it would allow other companies to compete with Intel in the business for microprocessor development systems. The decision at that time is understandable. No one understood the opportunity that the PC represented but it was an unfortunate decision. It would have been very powerful to couple an operating system to a microprocessor so that they could evolve together. Strangely enough, Intel’s operating system was called ISIS (Intel System Implementation Supervisor). Gary Kildall, one of the real legends in the PC industry who went on to found Digital Research and create CP/M, had been consulting for the Intel Development Systems Group. They stopped his contract and brought all the work inside, Kildall was forced to start his own company to sell his operating system. That is how CP/M was born.

    After IBM launched the PC, they worried about their dependence on Intel which was going through challenging economic times due to heavy competition in their core business of memory chips. IBM took several actions from 1982 to 1984. First, they invested $643 million for 20% of Intel stock. Second, they required that Intel license a second source for microprocessors (Advanced Micro Devices, or AMD). Third, they got certain limited manufacturing rights, as I described above. Five years later, IBM had divested themselves of all their Intel stock for a nice profit—but it was nothing compared to the future value of those shares. They also gave up their board seat. They had no idea how valuable and powerful Intel was about to become.

    IBM and Microsoft

    Bill Gates’s mother, Mary Gates, served on the board of the charity, United Way, along with John Opel, the President of IBM at the time of the IBM PC program. While is possible that she discussed her son’s company with Opel, and he then suggested to the PC team that they meet with Bill Gates. Frankly, I doubt this. By this time, Microsoft was the leading supplier of programming languages for personal computers. It was only natural that the IBM team would meet with them.

    Some of the IBM team, led by Jack Sams, went to Redmond, Washington, to meet with Gates, then just 23 years old. Microsoft had fewer than 40 employees and revenues of $7.5 million. The IBM team wanted to license various programming languages, including BASIC. But they also wanted to license CP/M, which was the most popular operating system for personal computers. IBM mistakenly thought that Microsoft could do that. Gates explained that CP/M belonged to Digital Research in Monterey, California, founded by Gary Kildall. Microsoft and Digital Research had a good relationship; they were not yet competitors.

    Gates called Kildall and said that he should meet with some people from IBM the next day, but he did not and could not tell him more, since he had signed one of IBM’s very restrictive non-disclosure agreements. The meeting between IBM and Digital Research did not go well. Kindall was not even there, leaving his wife, who was Digital Research’s main business person, to handle the IBM team. So, the IBM team went back to Redmond and asked Gates if he could do anything to help them get an operating system. Bill was familiar with a small company in the Seattle area called Seattle Computer Systems that had developed a CP/M look-alike called QDOS (for “quick-and-dirty operating system”). Microsoft paid about $75,000 for the exclusive license to QDOS. They then signed a license agreement with IBM, which was pretty much the beginning of the end for IBM’s PC aspirations. IBM did not want to pay a royalty. Instead, they negotiated a nonexclusive license for a fixed, one-time fee of $430,000. Microsoft was free to license others; of course, they had every incentive to do so since they had no upside in their deal with IBM. This, as it turned out, was one of the dumbest transactions in industry history.

    The 386 Almost Did Not Happen

    At first, neither Microsoft nor Intel realized the PC’s potential. Like IBM, they merely saw PCs as a new market segment. The IBM PC AT came out in 1984, around the time I joined Intel. Intel still thought that the computer industry would be dominated by vertical, proprietary computer systems. It hoped to develop the microprocessors that would be used for such systems and knew that the 8080 architecture was inadequate for that task.


    In 1982, Intel launched the 286 as a successor to the 8088/8086 used in the IBM PC and compatibles. IBM used the 286 in its PC AT.  (There was a 186, but since it was not fully compatible, PC manufacturers did not use it.) The architecture of the 286 had many design issues related to memory segmentation. Even as late as 1982, Intel did not view the 8080 architecture as its long-term strategy for the microprocessor marketplace. In fact, personal computing did not even make the list of the top 50 applications Intel’s 286 marketing group considered. Certainly, no one at Intel understood the need for full backwards compatibility. Compaq had to teach that lesson.

    The 286, then, was merely a stopgap while the 32-bit i432 completed development at Intel’s Oregon site. The company had decided not to develop a 32-bit version of the 286, a product Bill Gates described as being “brain dead.” Intel was focused on competing with Motorola’s 68000, for which the i432 was Intel’s chosen vehicle. So, in 1982, the 286 development group was disbanded. However, there was a “skunkworks” project under an engineer named Gene Hill to design a 32-bit successor to the 286, which they called the 386. At first, they did not even think about having backwards compatibility with the 16-bit 8080 family.  

    The i432 was Intel’s attempt to build a “mainframe on a chip.” To use Grove’s description, the computer industry was still vertical. With the i432, Intel was targeting mainframe and minicomputer companies. As it became increasingly apparent that the i432 would be not only late but also extremely slow performing, various engineers and marketing people began to think about alternatives. An architect named Glen Meyers began work on a follow-on to the i432, which became eventually became the i960. Within the 386 design group, led by John Crawford, discussion centered on targeting the workstation market. Some designers advocated giving up backwards compatibility in favor of increased performance.

    Compatibility eventually won out, for several reasons. The growth of the PC market was one reason. Another was lessons learned in seeing how Digital Equipment had successfully beaten Data General in the 32-bit market. Mike Richmond, who had recently joined Intel from Data General, was a big advocate for doing the 386 and making it fully backwards-compatible. In the late 1970s, Mike was on a team at Data General that was developing a very powerful computer that was not compatible with their 16-bit Nova offering. While Data General plowed resources into their cutting-edge design, Digital brought the less-powerful VAX to market. VAX was backwards-compatible with their 16-bit PDP-11, which allowed Digital’s customers to easily migrate their software to VAX. It also allowed Digital to utilize its existing development tools. VAX was a huge success in the marketplace, as a result of which Data General scrambled to bring out a 32-bit, backwards-compatible system, the Eclipse MV/8000. This story was covered in Tracy Kidder’s Pulitzer Prize–winning 1981 book, The Soul of a New Machine, which, according to Mike, most of the Intel decision-makers read.

    On October 11, 1982, a memo sent to a number of managers and executives, including Andy Grove and Les Vadasz, stated that the 386 would be backwards-compatible with the 286. This was one of the most important decision Intel would ever take, and Intel’s own needs for compatibility played a major role. Backward compatibility meant that Intel would not have to rewrite their development environment of compilers, assemblers, and debuggers. Bill Davidow, who was responsible for Intel’s development systems, pushed this hard. When I asked Lew Eggebrecht, the architect of the IBM PC, why he selected the Intel 8088, he said he chose the 8088 because of its development environment. This was an area where Intel excelled.

    To say that Intel almost walked away from the microprocessor architecture that formed the basis of the PC revolution would be understatement. 

    Wintel

    After completing deals with Intel and Microsoft, IBM began one of the most significant transfers of power and wealth in the history of the computer industry—maybe any industry. By 1992, the combined market capitalization of Intel and Microsoft exceeded that of IBM. One year later, Microsoft alone would surpass IBM in value. By 1999, Microsoft was worth three times IBM. In the process, Bill Gates, who had was just 23 years old when he made his deal with IBM, became a billionaire in 1987 and the world’s richest man in 1995. 

    Unlike Intel’s ambivalent approach, Microsoft wanted to sell operating systems for the PC market. Specifically, they wanted to bring Unix to the PC market. Unix, a very successful operating system developed at Bell Labs, was pretty much freely licensed, especially to universities. Microsoft got a license but were not allowed to use the Unix name. They called their product Xenix. (Eventually, Apple would also base their operating system on Unix.) Microsoft only acquired QDOS, which they renamed PC DOS, because they knew IBM needed an operating system, and they wanted to make sure that the IBM PC happened so they could sell tools for programming languages, like BASIC. It is not clear to me when Bill Gates realized that controlling the operating system would be key to Microsoft’s success. It certainly was not right away.

    As the PC industry began to take off, what was going on dawned on both companies. Besides seeing the potential impact the PC could have on both of their businesses, Intel and Microsoft were odd bedfellows. Within Intel, the relationship was characterized as being “fellow travelers.” The two companies soon found themselves dependent on each other. Many in the industry eventually used the term “Wintel” to describe Microsoft and Intel. Neither Intel nor Microsoft ever used that term internally, which greatly exaggerated the closeness of the two companies. While cooperation was in both companies’ interest, particularly in product development, each company also disdained the other. This played out in many specific conflicts over the years, fundamentally resulting from differences in their respective business models. David Yoffie and Ramon Casadesus-Masanell of Harvard Business School published an excellent, very detailed analysis of this in 2005. David Yoffie was on the board of Intel at the time.

    Conflicting Business Models

    As Yoffie and Casadesus-Masanell explained, Intel only made money when customers bought new computers. Intel also had to push customers to buy PCs with high-performance processors, where it had less competition from companies like AMD. Intel was always looking for a way to get existing customers to purchase new computers. Intel’s marketing group, led by Dennis Carter, would research what caused customers to buy anything at the high end.

    Microsoft, by contrast, could make money by selling upgrades to customers for their existing machines, thus allowing them to delay purchasing a newer computer. In the beginning, this was not such a large problem, because most PC buyers were new customers. Over time, however, the installed base became a larger part of the total market. Intel would push Microsoft to add features to Windows that required its latest microprocessors, and Microsoft would often resist. Microsoft supported the development of competing microprocessor architectures, and Intel supported the development of alternative operating system. In the PC market, neither of these efforts had much effect.

    Andy Grove and Bill Gates really did not like each other. Each felt that they were more critical to the development of the PC industry than the other. Once, during a meeting between Bill and Andy at Andy’s home, Andy got so angry he threw Bill out. The two companies were stuck with each other, though. Wintel was very much a marriage of convenience, certainly not love.

    Andy was disgusted by Microsoft’s product development, which he considered mediocre. He felt they were doing too much. Inside Intel, Microsoft was often tagged as “a mile wide and an inch deep.” That was pretty much true, but one could have equally labeled Intel as “an inch wide and a mile deep.”

    The two companies had joint, quarterly executive management meetings in alternating locations. After I was tasked in 1992 with leading our interactions with Microsoft concerning consumer products and services, I attended those meetings for many years. That gave me a lot of insight into the dynamics of the relationship. I met most Microsoft executives, including Steve Balmer, who would eventually take over as CEO of Microsoft. These meetings, suffice to say, were characterized by a lot of shouting. 

    Intel’s Strategy for Exploiting the PC Market

    Once Andy Grove realized the computer industry was restructuring, he wisely decided to put the full weight of Intel behind seizing the opportunity that IBM had given the company. It was a remarkable demonstration of leadership and courage.

    His strategy had 10 key ingredients.

    1. Exit the Memory Business

    Intel was formed as a semiconductor memory company and became the leading memory supplier before Japanese firms entered the market. In 1985, Intel saw the price of memory components fall by as much as 75% due to Japanese competition, some of which was illegal dumping. In a brilliant act of courage, Andy Grove and Gordon Moore decided to exit the memory business and focus on microprocessors. The fascinating story of how Intel got into the microprocessor business has been written about a lot. I discuss it in some depth in Chapter X.

    2. Focus the Company 100% on Job One

    Once Andy realized the opportunity that Intel had been given, he decided to focus the company on it. I used to joke that when I joined Intel in 1984, it sold silicon by the ton (the memory business), but then it found a vein of gold (the microprocessor). I would ask: “after you extract all the gold, where are you? In a big hole.” Andy went around and said that Job One was maintaining and expanding Intel’s dominance in microprocessors. Job Two was other business opportunities. Over time, Job Two would be reduced to business that helped make Job One happen.

    3. Out-Invest All Other Semiconductor Manufacturers

    Intel started to make billion-dollar bets in manufacturing capabilities. While Intel did not have the most competitive microprocessor architecture, they could make up for this by keeping at least a generation ahead of their competitors in terms of semiconductor process technology. Intel could only afford these investments if they could maintain their sale volumes and margins.

    4. Eliminate Second Sourcing

    Significant customers of semiconductor companies did not want to depend on sole suppliers for several reasons, including supply and pricing. They therefore required that companies like Intel establish second-source suppliers. At IBM’s insistence, Intel had licensed the x86 family to AMD. Intel’s relationship with AMD became very contentious, with much legal action on both sides over time. Intel was eventually able to reduce AMD’s ability to build compatible microprocessors. Intel also grew to understand the power of branding. When a court ruled that a number like “386” could not be copyrighted (not so surprisingly), Intel decided that future products would have copyrightable names. The change in naming was first implemented with the Pentium, which would have been called the 586. AMD’s equivalent product was called the 586. Intel had to put significant effort into branding, because customers assumed that the 586 would naturally follow the 486.

    5. Expand the Offering

    Since Intel wanted to capture as much of the semiconductor content of PCs as possible, it developed many of the supporting semiconductor chips, which were marketed as chipsets. Making chipsets also ensured support for Intel’s newest processors, which was critical to their rapid adoption in the market. Around 1993, Intel began selling motherboards to computer manufacturers like Gateway 2000, Packard Bell, and dozens of others. Intel provided technical support, reference designs, and development systems. Besides accelerating the adoption of its newest processors, Intel could also use these capabilities to reward or punish their customers. Getting early access to design information would allow a customer to bring a product to market earlier than their competition, and time to market was critical. Some of the chips for microprocessor-supporting standards, such as an I/O bus called PCI, also turned into major businesses for Intel in their own right.


    6. Transition to 386 Compatibility

    The 286 was a very successful product, and many in the industry—particularly industry leader IBM—were reluctant to move to a 32-bit processor. Unless software took advantage of the additional memory address space the 386 offered, there was no reason to buy a 386 PC. Software developers, meanwhile, were reluctant to create such software without an established market: a classic “chicken and egg” problem, and a significant problem for Intel.

    IBM would not move to the 386. In fact, as I described above, IBM was so convinced they did not need the 386 that they were willing to give up their second-source rights to all follow-on products if we allowed them to manufacture more 286 chips in their own factories. Intel decided that Compaq would have to go first and worked out some sales incentives. 

    Then Intel embarked on a very bold strategy. I remember the meeting in 1989 where Dennis Carter presented the brilliant idea to go after the 286 microprocessor via advertising: the Red X plan. At that time, PC manufacturers were reluctant to move to the 386. There was no real compelling reason for them to do so, because no software really utilized the capabilities of the 386, the first compatible 32-bit processor. Yet there would continue to be no software unless there were customers for 386-based PCs. It was a classic chicken-and-egg dilemma. Dennis proposed putting up billboards with the 286 crossed out. Intel would advertise, in other words, against its own products. Andy deserves a lot of credit for supporting Dennis’s bold idea. 


    7. Create an Ingredient Brand

    In 1992, in a meeting with Andy Grove in his conference room, Dennis Carter placed a Japanese newspaper down on the conference table. Dennis had been Andy’s first Technical Assistant and was now running marketing for the component group. The newspaper had lots of ads for PCs, almost entirely written in Japanese. But one ad had some English, reading “Intel in It,” meaning the PC contained an Intel microprocessor.   It was actually Bill Howe who ran Intel Japan that had come up with the idea in the first place. We were stunned that this company would make such an ad and realized that some value must be associated with our name. But it may also have been the result of Howe giving them a discount if they ran such ads.  It took awhile for Dennis to convince Andy.  Once Andy agreed, Carter went on to develop the very successful Intel Inside marketing program which involved givin marketting rebates to OEMs that supported the Intel inside program. 

    This was not the world’s first ingredient branding program for consumer electronics. Dolby, for example, launched one in the 1970s for audio. Under the program, Intel rebated 3% of the price PC manufacturers paid to Intel to support their advertising as long as it followed various Intel Inside protocols.

    Intel almost destroyed its brand in 1994 when Professor Thomas R. Nicely discovered a flaw with the some of the math calculations of the early Pentium Processor. When the press began to report the problem, Intel took the position that it was a minor problem. The media fueled what became a public outrage. IBM got on the bandwagon against Intel, likely because they did not want the Pentium to succeed (by this time they had introduced the PowerPC alongside Apple and Motorola). I remember Andy stonewalling on the issue, rationally insisting that the problem was tiny for almost all customers. He failed to understand the public relations implications, but he learned quickly. To quell the media firestorm, Intel offered to replace any Pentium Processor upon customer request. In the end, few did so. For most customers, replacement was more hassle than it was worth, and Intel was right in saying the “Pentium bug” was not a big problem. Andy and all of Intel learned the importance of understanding customers’ emotions and the power of the press.

    8. Focus on the Relationship with Microsoft

    After the introduction of the IBM PC and clones, it became evident that Microsoft would supply the platform’s operating system. Fortunately for Intel, MS-DOS only ran on the Intel architecture. Microsoft could have developed a version for other microprocessors. Since none of these were successful in the PC market, however, there was no real benefit to Microsoft to commit to the product development and technical support required to sell MS-DOS on other microprocessor architectures.

    Once it became clear that the PC market would comprise many different suppliers of PCs, Intel management realized that this situation was perfect for Intel. None of the suppliers had enough market share to dictate the industry’s evolution, not even IBM. But Intel also realized that the PC manufacturers’ narrow profits would keep them from doing much in the way of R&D. So, Intel set up an independent systems development group in its Oregon facilities, led by Craig Kinnie and reporting to Ron Whittier. The group included a number of very talented people, like Steve McGeady, and recorded an extensive list of accomplishments, including USB, various multimedia technologies, and Wi-Fi.

    9. Leverage Intel Capital to Grow the Market

    Les Vadasz and I started what would become Intel Capital in 1991 as Corporate Business Development. I had been making venture investments on behalf of Intel since 1988. One of our missions was to use venture investment to expand the market for PCs. I discuss Intel Capital in greater detail in Chapter X.

    10. The PC is IT

    Though it became clear that Intel could be the dominant supplier of microprocessors for the PC, the PC also had a competitor in the home. A significant effort, which I describe later, aimed to make the television the home’s central interactive device. For example, Larry Ellison, the founder and CEO of Oracle, and also Sun advocated that “The Network Is the Computer.” They evangelized the idea of a “Thin Client” that would connect to powerful, intelligent networks of computers. Intel began a campaign to convince the industry and consumers that the PC was the best possible interactive device in the home. I was very active in this campaign and discuss it in much more detail in Chapter X. In this respect, Andy came up with the powerful rallying cry, “The PC is IT,” a concept I totally embraced.

    Microsoft’s Strategy

    Bill Gates, too, soon understood the PC’s potential. Gates wanted to dominate desktop software and indeed all of the software industry. While Bill is very smart, he frankly is not the smartest person I have ever met. He is undoubtedly the most competitive, however. I also don’t think Bill was particularly good at mapping out the future. But he was great at recognizing others’ early successes and then stepping out in front of their parade.

    Make Sure Every PC Came Bundled with a Microsoft Operating System

    The key to Microsoft’s strategy was to get its operating system bundled into every PC shipped, and they were hugely successful at this. MS-DOS became the platform for application software developers. Digital Research and other operating system companies stood no chance. Though IBM had given them the opportunity, Microsoft knew how to take advantage. Microsoft also realized that they could sell upgrades directly to end-users later at a great price. (As I already mentioned, that led to conflicts with Intel, as we could not sell customers upgrades but instead relied on their purchases of replacement systems.) Microsoft sold operating system upgrades like Windows in a boxed set. When Windows was announced, customers lined up to buy it. 

    Leverage the Operating System to Expand into Application Software

    Microsoft’s customers were the PC manufacturers and, ultimately, their end-users. Microsoft did not have to worry about the reaction of application software developers, such as Lotus, because those companies had no choice but to offer their products to run on top of the Microsoft operating system. Microsoft therefore had free rein to develop their own application software, competing with Lotus by building a spreadsheet program called Multiplan. Microsoft first offered a word processor in 1983. PowerPoint resulted from Microsoft’s first significant acquisition and came to market in 1990. Over time, Microsoft added more and more application packages, which eventually grew into Microsoft Office.

    Eventually, Microsoft grew to dominate the operating system, development languages, and critical key applications (show graph to illustrate).

    Embrace, Extend, and Extinguish

    Embrace, extend, and extinguish was a phrase internal to Microsoft that the U.S. Department of Justice found during its antitrust investigation. Microsoft would sometimes embrace an industry standard and then extend it with proprietary functionality. Occasionally, Microsoft would acquire a startup just to put them out of business. Microsoft would also change things in the operating system, especially Windows, that would break software from other companies. The saying went, “Windows is not done until Lotus doesn’t work.”

    Consumer Brand

    Microsoft could establish their brand with end-users since they controlled the splash screen. They put the Microsoft and Windows logos right where the customer could see them. They also offered end-user hardware products, such as a Windows keyboard and mouse.

    Intel, Microsoft, and the Next Wave

    Even as both Intel and Microsoft experienced amazing growth both in terms of revenue and in terms of power throughout the 1990s, changes afoot would substantially negatively impact both companies’ futures.

    For years, Intel focused on increasing their processors’ performance. Many at Intel believed that there was a price point that consumers would pay at which they wanted as much computer performance as possible. It started to become difficult, however, to find applications that could use the increased performance and would drive customers to buy newer computers with faster processors.

    I vividly remember a conversation with Andy during which I told him that I had detected a change in the market. I said that before, when I went to parties, I heard people boasting about how fast their computers were. Lately, though, I was hearing people instead brag about how cheap their PCs were. I also pointed out that our competition was not other chip manufacturers but the monitor companies. Customers with only so much money to spend would have to decide between a faster computer or a bigger screen. Andy eventually came to realize this was true. As portable computers gained market share, Intel also struggled with power management. In engineering terms, higher performance and longer battery life stood in direct conflict.

    After Netscape debuted, Gates came to realize that the Internet would be critical to the future of the PC industry. Microsoft developed a browser, Internet Explorer, and bundled it with Windows. This launched the U.S. antitrust investigation of Microsoft, but Microsoft won the browser wars until Google came along. Like many others, Microsoft wanted to use the browser to create a web portal, like Yahoo, Lycos, or Excite. They failed to understand that search would be the killer application and so yielded industry leadership to Google. Once they finally did, they tried (unsuccessfully) to buy Yahoo. Microsoft did develop Bing, an “also-ran” search engine.

    Wrap Up

    My story of the impact of the IBM PC finishes around the end of the twentieth century. By then, the Internet was making itself felt, and later came the growth of mobile computers. Of all the dominant players during the PC era, only two thrived: Microsoft and Intel. IBM, while still around, is today a very different company. By 1993, IBM was in a nosedive, with losses that year of $8 billion driven primarily by the very changes in the computer industry that they themselves had unleashed. Most clone companies did not survive. Sadly, Intel got itself stuck in the PC era and has had trouble going much beyond that. After some time similarly floundering, Microsoft proved to be more agile. And though Apple never regained their leadership position in personal computers, they became the leader in mobile computing with the iPhone and iPad.

  • My book, The Flight of a Wild Duck is now available for pre-order on Amazon

    My book is now available for pre-order but only for ebooks at this moment. If you enjoy my blog then I think you will really appreciate my book.

    If you plan to read the ebook, I would great if you would pre-order now. This will help me a lot. If you want paperback or hardback, that will be only be available on September 1st. Use https://bit.ly/39Sblxa to get a reminder when that is possible.

    If you can help in promoting my book on your social media or blog/podcast, I would really appreciate it. I worked very hard to write this book. I think it will be interesting to many and even more importantly, it could help people like me, have successful and meaningful careers. But they will need to know about the book.

    The Flight of a Wild Duck: An Improbable Journey Through Life and Technology https://www.amazon.com/dp/B098KH6XZH/ref=cm_sw_r_cp_tai_EZ039EGAK1K1CSCPAV4S