Silicon, bucks and paranoia

Only the Paranoid Survive - Apple - Inside Intel
February 13, 1998

Perhaps Andy Grove is exaggerating when he claims that he is paranoid. Undeniably he is highly sensitive to rivals, real and potential, but some of these have been very long term threats. He was brought up in Hungary under the German occupation and then under Communism. He escaped from Stalinism in the 1950s, knowing at firsthand the paranoid state and the randomness of its persecution. What he offers is a not unreasonable view of the dangers of living in the semiconductor and computer industry since his escape. Any overstatement may just be to emphasise the need for constant alertness to rivals and the danger of changing trends. It was the chairman of Intel, Gordon Moore, who gave his name to the "law" that processor power would double every 18 months. It is to this rapid underlying beat that semiconductor, computer and software companies must march. To falter or to delay is to open the way for rivals. Tim Jackson confirms the vigour with which Andy Grove has forced Intel to maintain the pace. At times it has seemed strained, excessive and even frenetic, but not quite paranoid. It compares favourably with stories of the stress attacks suffered by Apple CEO Michael Spindler. Both Apple and Intel have engaged in extensive litigation against rivals, sometimes against partners and former employees. Grove went so far as to set targets for the number of lawsuits which should be initiated in each quarter. Apple anachronistically seeks to sell the Macintosh as a combination of hardware, operating system and software. The mindset of that complete solution held Apple back for years from licensing the OS or converting it to run on hardware with Intel chips. Other companies specialised to manufacture chips, operating systems, additional hardware and so on, achieving massive technological advance at high speed, with declining prices and constant availability of supply.

Jim Carlton refers in his subtitle to the convoluted politics at the top of Apple Computer. At times his book can be heavy going, though it is littered with wonderful quotes, stories and acerbic comments of the participants. There were repeated attempts to decide what Apple really is, who could or should lead it and whether it should be sold and if so, to whom. It seems that IBM came the closest, falling only at the final hurdle of price.

Many times we forget what were once thought to be life or death issues, such as Apple's Taligent project with IBM, the battle between RISC and CISC chips, or the flaw in the arithmetic calculations on one version of the Pentium microprocessor which caused Intel so much pain and suffering.

Achieving an accurate analysis is difficult among so many publicity conscious individuals who, in order to be seen as correct in the eyes of posterity, are keen to talk with the likes of Carlton and Jackson, journalists for the Wall Street Journal and the Financial Times respectively. Nonetheless, the remarkable pace of change, the volumes of money, the hundreds of millionaires created, the colourful and sometimes vicious rhetoric of CEOs will continue to claim our attention.

The differences between the two firms are clear. Intel has maintained the same top management over many years while Apple has dragged into the trashcan a sequence of leaders, albeit to retrieve one of them, Steve Jobs. Intel has gone to immense trouble to provide development tools to help its customers incorporate Intel chips into finished products. Apple has often treated suppliers of software for its operating system shabbily. Intel has around 90 per cent market share. Apple Computer has less than 9 per cent and looks to be falling.

Ewan Sutherland is a lecturer in informatics at the University of Wales, Lampeter.

Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company and Career

Author - Andrew S. Grove
ISBN - 0385482582
Publisher - HarperCollins
Price - £19.99
Pages - 222

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