September 29, 1997
Intel is a monopoly, and it is abusing its Slot One design
By Bob O'Donnell
In business, nobody likes monopolies. Unless you are the monopoly, in which case you'll
go to great lengths to explain that you aren't really a monopoly.
The computer industry's overall attitude toward monopolies seems particularly hostile.
However, despite lots of happy talk about all the creative developments in the high-tech
business and even some wishful thinking, virtually all of the industry's major changes and
developments are determined and controlled by only two companies: Microsoft and Intel.
They own this business.
Not surprisingly, lots of people are concerned about this and regularly voice their
anger and resentment over the power and influence of these companies. Strangely, though,
most of the vitriol is directed toward Microsoft, which is seen, and even referred to, as
the computer industry's "evil empire." Intel-bashing occurs much less
frequently.
This is confusing, because I think Intel has more power over the direction of the
computer industry than Microsoft. I guess because Intel's influence happens behind the
scenes, inside the guts of most computers, its power seems less troublesome than
Microsoft's, whose various OSes and applications are in your face. But the truth is, by
controlling processors, chipsets and motherboards as it now does, Intel is determining
what kinds of things computers can do and even the way in which features in the various
flavors of Windows are supported.
So I'm not really surprised that the Federal Trade Commission began investigating Intel
for possible anti-competitive and anti-trust issues. (See FTC subpoenas
Intel, begins investigation.) The company's recent moves in processor design,
particularly with Slot One, and its announced plans to purchase Chips and Technologies are
all signs pointing toward a company reaching a dangerously high level of influence and
control over an entire industry.
The Chips and Technologies purchase, which would give Intel a major foothold in the
graphics accelerator chip business -- one of the few remaining motherboard components it
doesn't already control -- is legitimate cause for concern. Except for cases, video cards,
and a few other peripherals, Intel practically builds complete computers for many of its
largest customers, including Dell and Gateway. So having Intel create the video cards,
too, just puts the company one step closer toward being the OEM of the entire machine.
But the really critical issue that the FTC should look at is Slot One. When Intel
introduced their latest generation processor, the Pentium II, they also announced that it
would connect to the computer via a proprietary connector called Slot One. (See The processor
wars: Slot 1 vs. Socket 7.) Because Intel has shown no intention to license Slot One,
it has effectively cut off the ability for other companies to create competitive chips.
The impact of the move hasn't been felt yet, but as Intel continues its rapid move toward
offering only Pentium II processors, it certainly will be.
Intel justifies the move to Slot One by claiming that it had to develop a new
architecture to support faster processors, a fact corroborated by independent analysts.
But it's also clear that Intel didn't have to move to a proprietary connection scheme. In
fact, ironically, Intel proved that point by announcing that it will be offering existing
Pentium Pro customers an upgrade to Pentium II technology by offering an Overdrive
processor that uses the non-proprietary Socket 8 format of the Pentium Pro.
In the end, the FTC investigation may not generate results any more real than those of
previous government investigations of either Intel or Microsoft. But if anyone asks me,
I'd say make the current Slot One and forthcoming Slot Two standards public, and give
everyone a level playing field. I have no doubt that Intel could continue to make great
processors and have a very profitable business, even with this potential
"setback," but at least it -- and we -- would have some competition.
©
Copyright 1997, by InfoWorld Publishing Corp., a
subsidiary of IDG Communications, Inc. Reprinted from InfoWorld,
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