I have been part of two significant technology companies that were leaders in their fields at one time, the time: Digital Equipment Corp and Intel. I was a Digital from 1979-1983 and Intel from 1984-1999.
Both companies, founded by outstanding entrepreneurs, left an indelible mark on the computer industry. Their strong cultures, while a source of strength, also became a barrier to adapting to the changing technology and markets. Digital, in its 41-year existence from 1957 to 1998, and Intel, still standing after 56 years since 1968, failed to adapt to a changing environment.
Each company was led by a charismatic CEO who refused to accept the future. I left both companies at their peak because of that and my inability to impact those companies’ strategies.
Both companies replaced the founder CEO with incompetent leaders. In the case of Digital, Robert Palmer took over from Ken Olsen in 1992. Seven years later, the company was sold to Compaq Computer. Andy Grove, the CEO who failed to understand the impact of the Internet and continued to double down on the Personal Computer business, brought in his replacement, Craig Barrett, who had even less understanding of the future than Andy. This led to a series of ever-worse CEOs until we ended up with Pat Gellinger. Pat who saw himself as the savior of Intel, will not save it. He is likely to be the last CEO of Intel. I suspect the company will end up being broken into pieces and sold off. By the time Pat became CEO in 2021, it was too late. The decisions that Pat made since taking the helm only made things worse.
As I have often written, the job of the Board of Directors is to make sure a company has the right leader. The boards of Digital and Intel failed spectacularly in this duty.
I feel bad for all those who worked at Intel and those who still work there. Like those who worked at Digitial, they love their company. Sadly, those at Intel are going through a very difficult time, which will not have a happy ending.
While there is a great deal of focus on generative AI and in particular ChatGDP and Bard, there are many other applications of AI that will have a profound impact on our lives.
I am in particular interested in how AI can augment our senses and our awareness.
The End of Lying
Visualize a plugin for Zoom or similar video conferencing tools that offers real-time insights into participants’ emotional states, even hinting at their truthfulness. This concept isn’t far-fetched, thanks to micro-gestures. These minute, often unconscious, facial and body movements reveal a wealth of information about emotions and intentions. Despite their subtlety, they’re crucial in decoding non-verbal cues. Micro-gestures can manifest as small changes in facial expressions or minor adjustments in body posture, conveying unspoken thoughts or feelings.
Revolutionizing Health Monitoring with AI
I have been experimenting with an iPhone app (Binah.ai) that tracks vital signs. It can assess heart rate, respiration, blood pressure, and even glucose levels just by analyzing my facial features over a minute. This advancement suggests a future where augmented reality devices might allow us to view others’ vital statistics in real-time.
Voice Analysis: A Window into Emotions
Another AI frontier is emotion recognition from speech. This technology interprets emotional states from voice characteristics, such as tone, pitch, and speed. By analyzing these vocal elements, AI systems can identify emotions like joy, sadness, or anger. This has broad applications, from enhancing customer service experiences to aiding in psychological therapy. However, the challenge lies in accurately capturing the emotional nuances that differ across languages, cultures, and individual speech patterns.
AI’s has the capacity to augment human perception and give us insight into ourselves and other people. It could profoundly effect how we interact with others.These are just three examples. I am sure you can think of many more.
These days, I am busy working on technologies to detect and treat cancer. I thought I was done with work, but I could not resist having another opportunity to make a difference. As I approach 80 (79 next month), I am sure this is my last chance.
Thinking about the future always makes me think about the past. Today, I remember the creation of residential broadband, in which I played an important role. It is 30 years since we (Intel) introduced a cable modem at the cable industry’s most important conference, the Western Cable Show. About a year earlier, while leading Intel’s efforts in partnership with Microsoft and General Instruments to develop an interactive cable TV set-top box, I realized that the TV would not be the interactive device in the home. It would be the personal computer. By that time, about 20% of homes in the USA already had computers. The number of homes would grow to over 60% by 2003 and over 80% in 2013. But to truly make the personal computer the interactive device in the home, I knew that it would take an always-on, always-connected high-speed network.
I had put together a project inside Intel with General Instruments but left out Microsoft to develop a cable modem. A few other companies were also working on cable modems, Zenith and LANCity. At that conference, we announced that we had entered into trials with Comcast and Viacom (who had a cable business at the time). Putting Intel’s weight behind this effort was essential in aligning the cable (and Telco) industries, as well as key technology companies like Cisco and HP.
It would take seven more years to reach the first million homes in the USA. We also worked with the phone company to develop DSL technology. I write extensively about this in my book, The Flight of a Wild Duck, Part III. If you are interested in this history, I think this section of my book is worth reading.
We achieved high speed, always on and always connected. And I think you would agree that it was transformative.
What would the impact of eliminating cancer be? In terms of longevity, it would add more than three years to the average person’s life span. But more importantly, it would add many years to the health span. So is this possible?
I think so, driven by the early detection of cancer using AI-based methods and personalized treatments such as training a patient’s immune system to detect and kill their specific cancer. I hope this will happen a lot faster than the creation of residential broadband. Not only do I want to be around for this, but I want to play a role in making it happen.
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.
The Vision Pro is most likely the first Apple product that does not have at least some input from Steve Jobs. Possibly he was not involved in any way with the Apple Watch, but since he passed away on Oct. 5, 2011, the Watch came out in Sept 2014, just three years after his death. I would think he was involved in discussions about the Watch. I doubt he was involved in Vision Pro, but aspects of it were probably under development back then. I suspect Jobs would not have supported Vision Pro, but I do not know. Perhaps it is the “Lisa” of its time, and eventually, there will be a “Mac.”
Is the Virtual And Augmented Reality the Interactive Television of its time?
Apple announced Vision Pro, a very capable, expensive, and heavy entry into Virtual and Augmented Reality. They only use the term Augmented Reality. Watching their presentation reminded me of the promise of Interactive Television. Many of you reading this post may not remember all the hype surrounding the concept of interactive television in the 90s. But I was there!
The Full Service Network-and all that Hype
It began in 1992 when the CEO of Time Warner, Gerald Levin, began discussing a concept he termed “The Full Service Network.” Time Warner then sent a Request for Proposal to most leading technology companies. We received it at Intel, where I reviewed it since I was the only company executive interested in the consumer market. But I gave it a pass. However, others in the industry felt differently. In particular, Bill Gates later incorrectly said that the square foot on top of the TV was the most valuable real estate in the home (back then, TVs did have a top). Bill, whose strategic abilities are vastly overrated, called Andy Grove, a call that changed my life. Bill told Andy that Microsoft wanted to develop technology for the home but could not identify anyone interested at Intel. Andy knew of my interest in developing the home computer market and had permitted me to investigate this possibility even though he did not believe there was a market for home computers. So Andy said, “What do you mean? Do you know one of our Vice Presidents, Avram Miller? Avram is working on developing our plans in the home.” Bill knew me. I first met Gates in 1981, when I was at Digital Equipment Corporation. He was just 25. Bill responded to Andy by saying that he knew me and that I should come right away to Redmond and meet with Rob Glazer, who was leading Microsoft’s consumer activities. It is a long story you can read about in my book, The Flight of a Wild Duck.
Andy told me that while he still did not believe in the home market, he realized Bill did. He told me my job was to keep Microsoft engaged with Intel and away from our primary competitor AMD. Other than that, he did not care. But this created the opening I had been looking for a way to access Intel R&D resources. At first, I thought we would target the interactive tv opportunity that Time Warner had ignited. Microsoft and Intel began working with General Instruments, the largest set-top-box supplier, to develop an interactive television product. I called it Pandora’s Box.
The PC is it-the birth of residential broadband and the consumer internet.
After a few months, I realized that Interactive Television would fail. It took others a decade to come to that conclusion. We kept the project going to keep Microsoft happy and away from AMD. But in the meantime, the CTO of General Instruments, Matt Miller, and I came up with the idea of using the cable system to provide high-speed residential broadband to personal computers in homes. In my book, you can read what Gates said to me once he discovered we did an end run on Microsoft. So once again, I refer you to my book, where there is a lot of detail.
In the meantime, billions of dollars were lost pursuing interactive TV led by Levin, who should go down in history as one of the greatest destroyers of corporate value (check out his acquisition of AOL, for instance). On the other hand, Intel made billions by investing in companies like Broadcast.com. Broadcom, Verisgn, Launch Media.
Time Warner finally selected Silicon Graphics as its primary technology provider, which would eventually contribute to that company’s demise. The Full Service Network debuted in Orlando in 1994. It was a gigantic failure, although some declared it a success even after it was turned off in 1997. It was too expensive and limited, but that could have been overcome. What could not be overcome was that people did not want to interact with their TVs.
By this time, it was becoming more apparent to me that the interactive device in the home would be the connected PC. We had a rallying call, “The PC is IT.” I am proud of my role in making this happen.
So how does this relate to Virtual Reality?
The technology, media, and communication industries were sucked into the interactive dream. Many presentations showed people sitting on their couches, doing everything we now do on PC and have been doing for over 20 years. But they ignored a few key things:
People do not want to interact with their TVs (except those who like computer games) other than “changing the channel.” That is the kind of interactivity we are comfortable with at 12 feet. The 2-foot experience we have with our computers and how other digital devices, like phones and tablets, is a different experience and not one we usually share with the family sitting next to us (who are probably on their devices).
The TV at the time was not suitable for interactivity. It did not have enough pixels to support the resolution required. But even if it did, interactive TV would have failed.
The interactive TV was to be a closed system controlled by television providers, while the PC interactive market was built on the back of the Internet, which was an open system.
Do people want to wear a face computer?
Having a smartphone in your pocket or purse differs from having a computer on your face because our pockets and purse were designed to carry things, unlike our faces.
Wearing a massive device on your head will be the most significant limitation. It will likely prevent the widespread adoption of VR/AR, at least in the form of the recent announcement of Apple’s Vision Pro. We have strong instincts not to wear devices that cover our faces which will be hard to overcome. While the Vision Pro does not cover our nose and mouth, it comes very close.
For instance, many people suffer from Obstructive Sleep Apnea, a severe disease. There is a treatment called CPAP, but it requires a mask to cover the nose and mouth. People find this extremely difficult, and most can not tolerate it, even though they know that not being treated can have grave and deadly consequences. In particular, humans have a strong instinct not to want to have objects between them and the air they breathe. Apple is a brilliant company that does a lot of research. I would love to understand how much they did to determine if people would wear a face computer.
What happened to 3-D Television?
Didn’t we have 3D television for a while? Major Television manufacturers like Samsung announced 3D capabilities around 2010. After a few years of consumer curiosity, interest waned, and now no more 3D-compatible TVs are being made.
Vision Pro-Apple’s Segway?
The Segway was a personal transporter that was invented by Dean Kamen and brought to market in 2001. It was very hyped. John Doerr, the legendary venture capitalist, is reported to have said that the Segway could be more important than the Internet. It was a total failure. Much of this failure was assigned to city governments that used regulations to limit the use of the Segway. But I think that was not the problem. Just look at the growth of e-scooters, first introduced in 2017. They are now a plague in most cities. It was the marriage of personal transportation to the sharing economy. Being able to pick up and leave the device made the difference. Who would want to own a Segway if you had to keep or park it? History shows us it was not a consumer product, just as Vision Pro will likely not be a consumer product.
Vision Pro will find its niche.
Vision Pro will likely be a niche product. I am sure it will be successful in vertical markets like medical and defense. Perhaps we will use such products for video communications like Zoom. But I don’t see it becoming the next “iPhone.” I hope I am wrong. I think Apple needs another platform; sadly, this will not likely be it. I don’t believe that all the fantastic engineering they have done can overcome the issue of wearing something of the size and weight of the Vision Pro.
An Alternative Approach to Virtual and Augmented Reality
I do believe that Virtual and Augmented Reality will create significant markets. But we will need a different way to achieve this for consumer applications. I first started working in this field in 1999 through an association with a company called Microvision. We were going to do direct-to-retina displays. Our approach had several technical and business issues. The team left and formed Innovega, where I have been an advisor and investor for over 20 years. We still have a ways to go, but the concept is sound.
Our technology involved using a contact lens with a remarkable macro capability to see things very close to the eye, allowing people to wear something akin to regular glasses. We know that people are willing to wear glasses, and many are willing to wear contact lenses. However, I am not writing the blog post because I have a stake in Innovega. I have a stake in
Innovega because I believe this approach can lead to broader adoption of VR/AR than products like Vision Pro.
I should also say that if anyone can pull off a product like Vision Pro, it will be Apple. I certainly will be an early adopter, just like I was for Oculus, which I have used for less than two hours over two years.
The Heard Mentality
I am fascinated by phenomena like this. I think about the early days of PDAs (Personal Digital Assistance) like Newton and GO), Interactive TV, and Segway.
It is the herd mentality that drives all this. When Steve Jobs was leading Apple, he was not susceptible. It was one of his greatest gifts.
From Microvision/Avram Announcement in 1999
Microvision, Inc. (Nasdaq: MVIS), the leader in retinal scanning display technology, announced today that it has entered into a multiyear consulting agreement with Avram Miller, a leading business development and strategy consultant. Microvision and Miller will team on the development of Microvision’s next generation retinal scanning display technology for applications in mobile computing devices.
By scanning a single beam of light directly onto the eye, retinal scanning display technology projects high resolution color images without the use of a conventional display screen or panel. To date, the importance of this technology has been its use in “heads-up displays” for military, medical, and industrial uses. More recently, Microvision has demonstrated a “consumer” version of the technology that will make it possible for mobile devices such as cell phones to display the same amount of information as notebook computers at reasonable cost. The company believes this has the potential to redefine the role of displays in mobile devices such as Cell Phones, PDAs (personal display appliances), and game devices.
“Several months ago, we made a strategic decision to accelerate our activities relating to displays for mobile internet applications. Soon after, we achieved a technical milestone, demonstrating, for the first time, a prototype of a retinal scanning display that used just three micro-miniature LEDs and two scanning mirrors to form a high resolution video image,” said Rick Rutkowski, CEO of Microvision, Inc. “When we realized what we had in hand, we knew that it was now time to get help from someone who had the strategic vision, industry connections, and ability to make things happen on a large scale. We are very fortunate to have Avram Miller collaborate with us in redefining the display capabilities of mobile devices. Avram has a proven ability to recognize major technological discontinuities that create significant business opportunities and then to act on those opportunities.”
“Mobile devices are where it is at,” said Avram Miller, CEO, The Avram Miller Company. “It reminds me of the early ’80s and the birth of the PC. So many critical technologies are converging in the mobile arena. Bandwidth is coming with 3G, voice recognition promises to change the way we command and communicate with mobile devices, location detection will increase the relevancy of the information we receive, and when combined with miniaturization and long battery life, mobile devices will become a fundamental part of everyone’s lifestyle. All of this,” Miller continued, “will be connected to the ever-expanding power and pervasiveness of the Internet.
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.
I was shocked when CNN put on an hour-long Anti-truth Marathon, which they called a Town Hall, featuring one of the most dangerous and deranged leaders of a political party, Donald Trump. I should have seen the handwriting on the wall earlier when Discovery Networks took over CNN, HBO, and Warner Brothers. How Discovery Networks ended up consolidating all these cable networks would take a large book to explain.
I knew John Malone pretty well in the 90s. In my book, Il volo di un’anatra selvaggia, I write extensively about my interactions with him. Malone was one of the most intelligent people I had ever met in business, although I would sometimes refer to him as the “Master of Sub Optimization.” He had a firm grasp of technology, but his brilliance was in financial engineering. I have to say that I liked him on a personal level. He was always very friendly and had a great sense of humor. Malone ran two businesses, TCI, one of the world’s worst cable networks (and that says a lot given how awful so many cable companies were), and Liberty Media, which was started and led by my dear friend, Peter Barton, who left us too early in 2001 at 51. Malone sold his cable system to AT&T in 1999 for $55 billion, which was then sold to Comcast in 2002 for 72 billion, including Media One, for which AT&T had paid $44 billion just two years earlier. He kept Liberty Media, which is how he eventually controlled Discovery Networks.
During the many years I interacted with Malone, we never discussed politics. But I was not surprised to learn he was a libertarian. Now he is 81 years old and, I assume, very active, serving on many boards. He is also the largest owner of land in the USA.
Malone’s relationship with Rupert Murdoch is entangled and often not positive. Malone is much more intelligent than Murdoch (and at 82, he is also much younger). Malone has been, and I assume, is still a supporter of Trump.
I could not figure out how much influence Malone has over Discovery and, therefore, CNN. But it must be a substantial. On the other hand, the actual CEO of Discovery is David Zaslav, a Jew whose family came from Ukraine and Poland. He has made significant contributions to Democratic PACs in the past. Malone has been a big supporter of Zaslav. But my gut tells me that CNN is going after Fox News with the object of replacing it as the Opiate of the Right.
The one thing that can make this even worse would be the involvement of Elon Musk.
While writing my book, The Flight of a Wild Duck, I couldn’t help but speculate on alternative realities. So much of one’s life is driven by random events. So it was easy for me to imagine how things could have unfolded differently. One of the possibilities that intrigued me was derived from the significant shift in the computer industry resulting from the introduction of the IBM Personal Computer in 1981, mainly because this had a profound impact on my career. Before its introduction, the computer systems industry comprised Mainframe Computers, with IBM having the majority of the market and Mini Computers with Digital Equipment Corporation. In addition, personal computers were a tiny market serving hobbyists and computer enthusiasts.
In 1980, Apple had started to develop a business market driven by the introduction of VisiCalc, the first spreadsheet. IBM noticed and decided that they wanted to participate and even dominated the nascent personal computer business market. However, in their haste to get to market quickly, in less than 12 months, they failed to protect the architecture of their personal computer, which allowed companies like the newly formed Compaq Computer to develop fully compatible computers. IBM saw the personal computer as a new opportunity but failed to understand it would evolve and eventually take away market share from Mainframes and Mini Computers.IBM was not alone in this. No major technology company foresaw the titanic shift that would turn the computer industry on its side.
IBM, the dominant player in the computer industry, began to suffer significant losses and had to exit the personal computer market and eventually restructure as a service company. In addition, minicomputer companies like Digital Equipment started to suffer substantial losses. Ultimately, Digital was acquired by Compaq, one of the leaders in the personal computer market. The driver of the personal computer industry was standards, mainly when it came to application software. The result was that PC manufacturers had difficulty differentiating themselves from one and another. Lead by Compaq Computer Corporation, manufacturers of IBM-compatible computers, known as clones, successfully competed against the very personal computer market that IBM had created. Eventually, Asian manufacturers entered the market with lower-cost versions, putting great pressure on IBM and American clone manufacturers.
Microsoft and Intel had a virtual monopoly on the personal computer’s two most essential parts, the operating system and the microprocessor, two critical suppliers to the PC industry. While they had done little initially to develop the personal computer industry, they were successful in taking over its leadership. In the process, they extracted all the profit from the personal computer industry, resulting in becoming two of the most valuable companies in the world. As the personal computer began to dominate the computer industry, Andy Grove, then CEO of Intel, made an important observation. The computer industry had moved from a vertical organization in which computer companies developed and manufactured all the key elements of their computer products to a horizontal industry where there were different leaders amongst all the crucial components such as discs, software, semiconductor components, and even distribution. Andy thought not only was this very profound but that it was more or less a permeant shift. He describes this in his book Only the Paranoid Survive (page 44).
Not only was Andy convinced, but most of us in senior roles in the computer industry agreed with him. By that time, the only significant vertical manufacture of personal computers was Apple with the Macintosh. Apple had a tiny market share made up of devoted users mainly from the creative community. Most thought that Apple would eventually fail, and it almost did. But it would turn out to be Apple and Steve Jobs that would once again turn the computer industry on its side, returning to the vertical model. Looking at the world of mobile devices that dominate computing, we can see the leading player, Apple, is vertical although out-sourcing its manufacturing and some key components, but they are proprietary. In the Android world, the operating system is an independent component similar, but otherwise, major suppliers like Samsung operate similarly to Apple. So I take it to be that the development of the personal computer industry was not a given. IBM with the PS/2 and OS/2 tried to return to the vertical model, but it was too late.
What was inevitable with that computers would be designed for the individual? Yes! Changes in technology such as semiconductors, Winchester disks, and networking would have driven the computer industry to create computers that would have looked a lot like the IBM PC and the computers that followed. More and more people were getting exposed to using computers. But it would have also been likely that the key computer companies like IBM and Digital Equipment Corporation could have developed proprietary systems much in the way that companies like Sun and Silicon Graphics did for graphic workstations.
In 1980, when I proposed developing the Professional Series Computer to the Operations Committee at Digital Equipment, I had knowledge workers in mind, including individuals working in small offices. Rather than break with the computer systems that Digital was offering, I saw the Professional as an extension to the ecosystem that Digital had already developed. I wanted to develop a computer designed for the individual but compatible with the company’s other computer offerings, able to run the same application and utilize the same communication network. Even though the Professional was based on the PDP-11’s 16-bit architecture, we came up with a way to run application software on it which was designed for the VAX line of computers. Years later, I would discuss this with Don Estridge, the person generally credited with the development of the IBM PC. He told me that the Professional was the personal computer that had concerned him. But he had nothing to worry about as the Professional would end up a failure.
There were many reasons for the failure of the Professional, and I am responsible for a number of them. But the foremost reason was the advent of the IBM PC which would upend the entire computer industry, including IBM. In addition, the arrival of the IBM PC provided an opportunity for other groups within Digital to challenge my strategy. In particular, one of the company’s product lines proposes a practice similar but not fully compatible to the IBM PC, The Rainbow. Another, the Word-processor Product Line, run by Ken’s brother Stan, decided to build a dedicated Word processor, DecMate II. Ken Olsen, the CEO, loved internal completion. He was delighted to have three products and their teams going after each other. Like most new products, there were some serious flaws with the initial implementation of the Professional. It was way over-engineered, causing it to take too long to develop. It had performance problems and was too expensive. But had the IBM PC not come along when it did and had Ken Olsen not decided to end up with three competing products (He said “Let the market decided” and I said “they did. They bought IBM’s product”, I think the Profession could have been successful.
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.
