Author Michael Malone at the Commonwealth Club: The Story Behind Intel

On August 6, 2014, Michael Malone, Author of The Intel Trinity, spoke at the Commonwealth Club of Silicon Valley.  The program was held  in the upper galleries of the Tech Museum in San Jose, CA. Similar to his earlier speech at the Computer History Museum, Mr. Malone emphasized the evolution, leaders, and current direction of Silicon Valley technology.   The history of Intel and its three great leaders- Bob Noyce, Gordon Moore, and Andy Grove - was discussed only in metaphors and general terms.  The few examples he provided seemed to be historically inaccurate, based on this author's recollection. ...................................................................... The Commonwealth Club event abstract  states: "From his unprecedented access through the corporate archives, Malone has chronicled the company’s history and will offer his thoughts on some of the formidable challenges Intel faces in the future." ...................................................................... In my opinion, the most important thing Malone said during his talk (including the Q&A session) was that Intel was the "keeper of Moore's law," which has been responsible for almost all the advances in electronics for several decades.  That's due to Intel being able to continue to  advance the state of the art in semiconductor processing and manufacturing which enables them to pack more transistors on a given die size, increase speed, and reduce power consumption. Another important point Malone made is that the willingness to take risks and "good failure" are important aspects of Silicon Valley's innovation process.   The right kind of failure can be a career booster.  For example, leadership, vision and high confidence of a CEO/CTO of a failed start-up is valued more than a lucky success.  Malone said that ~95% of Silicon Valley companies fail, and that few companies maintain their lead for more than a few years.  He's certainly right about that! Next came what appeared to be a contradiction.  "Our acceptance of failure and even good failure is overrated," he said.  That's because a failure can not be equated with success.  "When it occurs, failure is what it .But if you learn from your failure deeply enough and apply those lessons to your next job/start-up it is a good failure" (and, therefore, a very good thing). How has Silicon Valley gained worldwide respect for innovation and tech leadership? "People here in Silicon Valley have learned to learn and change for the better as a result of their good failures." So how then can a "good failure" be "over rated" if it's a key ingredient of the success story of Silicon Valley? "Intel has made more mistakes/failed more than any company I've ever studied,"  Malone opined.  He then qualified that statement saying "Intel failed in a positive way.  Intel has taken more risks over the last half century than probably any company."  To continue to progress Moore's law, "Intel is required to take four or more existentialist risks per decade," Malone added.  We can't disagree with that, as continuing to invest in wafer fabs and new semiconductor processes is risky and expensive. "Intel is that rarest of company's- one that has learned how to learn; turn a failure into a good failure and a success." [That was certainly true till 2007, when Apple introduced the iPhone and the mobile computing boom started.  Intel has no- cceeded in mobile computing as they invested in and was the cheerleader for WiMAX - a failed "4G" wireless technology.  The company didn't invest in LTE which, almost all wireless telcos were committed to for "4G."  Also, Intel was not able to reduce power consumption of its AToM processor, so was unable to compete with ARM Ltd's CPU core (used in over 90% of all mobile devices).  Despite several acquisitions (especially Infineon's telecom chip group) there are still no LTE chips or SoC's from Intel.  Nor have they captured significant market share of microprocessors used as "the brains" of mobile devices.] Malone then goes on to tell the story of Intel's first microprocessor (the 4004), as he does in his book.  [According to Intel insiders I know, that story is highly inaccurate. We will explain why in a follow up article.] Malone makes it seems like the invention of the Intel 4004 was a mistake, because Intel was an upstart semiconductor memory company and took on the Busicom calculator/ custom chip-set project because they needed the money to survive.  According to Malone,  Intel turned that mistake around and created the microprocessor chip business, even though no one at Intel really knew what that business was about or would evolve into .  Malone claims that after a few years (date not specified) the entire Intel management team was behind the decision to ditch memories and become a microprocessor company with only two EXCEPTIONS (who presumably were not aware of that decision) -- Intel's CEO (Bob Noyce) and Chairman of the Board (Arthur Rock).  Really?  A totally different account of Intel's transition from a memory to microprocessor company is detailed here (Oct 2013 IEEE program video segments and slides available). It's beyond the scope of this article to analyze and debate Malone's account of Intel entering and committing big bucks to the microprocessor business.  What's surprising is Malone didn't even mention the 8008 or 8080 microprocessors during his talk.  Or the competition Intel faced in the mid 1970s from National Semiconductor, Motorola, and Zilog. Next, was the tale of "Operation Crush" - Intel was threatened by Motorola's new microprocessor- the 68000 around 1979-1980. So the company "locked up its management team for four days to come up with a response," which was reportedly a statement that "we will offer a systems solution,"  e.g. development system, in circuit emulator, peripheral chips, etc.  Really?  Intel had been providing those tools and support LSI chips since the 8080 microprocessor came out in 1975. The true story of "Operation Crush" is chronicled by an article on the Intel website. It's goal was to get 2,000 "design wins*" for the 8086/88 microprocessors within a year after its launch in 1980.  It did better than that with 2,500 design wins, including IBM's selection of the 8088 for their first PC. Dave House (a classmate of this author at Northeastern University MSEE program- 1968-69), was a leader in that process- he proposed the 8088 with compatible 8 bit bus peripheral chips after IBM had rejected the 8086.  House is also quoted on why Operation Crush was a success in the aforementioned article on Intel's website.  Yet Mr. House was not mentioned in Malone's speech and gets no credit whatsoever in his book. *  A "design win" is a new customer selecting and ordering a given component/module for its systems design. ............................................................... Another very interesting point Malone made was that Silicon Valley lacks a voice/ role model/ tech business leader it once relied on. He began by chronicling the leaders/icons/spokesmen for the Valley over time. The first "Mayor of Silicon Valley," Malone said, was Stanford's Fred Terman, who fostered University-Industry cooperation via the Stanford Research Park and paved the way for the valley's tech future. The second was Hewlett-Packard founder David Packard; and the third was Intel co-founder Bob Noyce, whose death at age 62 in 1990 created the regional leadership vacuum we still have. "With Noyce's death, who was going to take his place?" Malone wondered. "The next guys in line were Steve Jobs and Larry Ellison. You weren't going to put those guys in charge of a community." "This valley needs some sort of strong leadership and a well recognized spokesman," he said. "Until we get that, this valley's going to speak in a lot of different voices. We really need to speak with a single voice here," he added. "Perhaps that voice (they Mayor of Silicon Valley) might be (Stanford President) John Hennessy," Malone said.  But that's not likely, he added, because Malone believes Hennessy wants to retire soon and move to a beach home or equivalent retirement paradise. [A 1.5 hour interview this author did with Professor Hennessy can be viewed here along with comments on the event from the Professor and attendees.  The individual captioned video segments are here] Related excerpt from WSJ OP ED on August 22, 2014: Why Silicon Valley Will Continue to Rule the Tech Economy  (on-line subscription required) Human talent and research and design labs are arriving to dominate the new era of devices. This shift is already under way. The epicenter of Silicon Valley has always migrated. With the return to hardware, it is now preparing to leap back to where it began 75 years ago—to Mountain View...... Finally, Silicon Valley needs a de facto "mayor," the person who represents its broad interests, and not those of a particular company, industry or advocacy groups. The Valley began with such individuals—Stanford's Fred Terman, Dave Packard and then Intel founder Robert Noyce. But that ended with Noyce's premature death in 1990. Now, poised to reinvent itself one more time and lead the global economy again, Silicon Valley needs another leader to address the great changes to come. Closing Question:  Why did Malone continue as a journalist despite being so close to the leaders of Silicon Valley? Malone said he grew up in Mt. View from 1963 and then moved to Sunnyvale later in the decade.  In the late 1960s,  he knew Steve Jobs from elementary school and his buddies were on the swim team with Steve Wozniak.  But it gets a whole lot more cozy than that! "On a given afternoon in the 1960s, Ted Hoff, Bob Noyce, and Wozniak were all crossing each other on a corner very near my home (in Sunnyvale, CA)."  He infers he knew all of them very well along with David Packard (who wrote his grad school recommendation letter) and other Silicon Valley celebrities. [NOTE: Go to 1:07 of the event audio to hear it yourself!] "Longitudinally, I've seen all of Silicon Valley, he said.  "It was all right there in my backyard." Closing Comment: There's at least one problem with the assertion that Hoff, Noyce, and Wozniak were buzzing around Malone's corner street in the late 1960s:  Ted Hoff, PhD, did not know Malone in the 1960s and he didn't live in Sunnyvale during that entire decade! We will be back with Mr. Hoff's rebuttal to Malone's Intel Trinity book in a future blog post.    Here is the first one: Ted Hoff: Errors & Corrections in Intel Trinity book by Michael Malone ......................................................................