Inside Intel: A vendor dossier

Inside Intel. We know, you've heard that title before. Indeed, there have been dozens of books already written about the world's biggest chips company. Here, Tony Hallett provides a snapshot of the company - its strategies, personalities and culture - as it enters the most challenging phase of its development yet.

Intel is changing. Ask its top executives whether that's true and they may well disagree. Look at the regular-as-clockwork billion dollar plus quarterly profits, the continued dominance in PC processors or the familiar faces at the top and it looks like a familiar story.

Only it's not. If you're a microprocessor designer and manufacturer your day-to-day work isn't straightforward. Intel has made it seem that way over the past 20 years. Product roadmaps were released, chips were launched and so on. Business boomed.

And as Chuck Malloy, oft-quoted Intel spokesman, told silicon.com: "We built one of the most lucrative franchises in the history of industrialised society."

Now, however, what Intel's does is getting even more complicated. It has long been at the heart of most mainstream computing, its Pentium processors in recent years found inside laptops, desktops and many servers, but becoming a communications and consumer company is changing the genetic make-up.

To Intel, it's all about silicon. Whether integrating the technology that allows wireless networking onto a single processor chipset or enabling digital media players - the gadgets of the future - it's all about silicon. Segmenting products, from XScale microarchitecture to Celerons to Pentiums to Xeon to Itanium - it's all about silicon.

And this is even if silicon isn't always about silicon these days. The company's new advances - including silicon photonics and carbon nanotechnology so small it is measured alongside viruses and manipulated at an atomic level - show it is pushing on, planning 10 years ahead. The idea of the billion transistor chip is now not that amazing. Talk is of 10 billion chips in four years or so.

The point is that server sales may ebb and flow from one quarter to another but the meta-story for Intel is about advancing technology building blocks and finding markets for them. That mission remains simple even if the technology and its applications are getting more complex.

One striking thing about the company, up close, is the near fanatical devotion of its staff. This ranges from the very top to the lower levels. Twenty per cent of its 83,000 staff have been there over 20 years and few executives have been there less than a decade.

Founding fathers Robert Noyce, Gordon Moore and Andy Grove still, by common consent, cast a tremendous shadow over the whole business. Spokesman Malloy describes Noyce as "the prototype Valley entrepreneur", Moore as "the consummate scientist-engineer-businessman, a leader by example" and Grove as a man of strong discipline.

Every book on Intel will say it. After its late 1960s birth, it struggled for a decade, especially when Japanese manufacturers started competing ferociously in the memory chip market. The founding fathers steadied the ship and moved up the value chain with the birth and commercial success of the microprocessor.

The PC revolution and much more besides followed. But can success on the scale of the 1980s and 1990s be maintained? Intel had its version of the Cuban missile crisis when a court case brought by Intergraph and an FTC probe almost resulted in a Microsoft-style anti-trust action in March 1999. This writer was preparing to cover the case when it was called off after an eleventh hour settlement. But still, there are many unspoken limits to how Intel can throw its considerable weight around.

Its executive team certainly looks capable of moving the company to the next stage. You can tell Intel is a Valley company by the presence of an Indian and Brit at the top level but outside Grove and CEO Barrett, who are the drivers?

Several men - and they are all men - command the highest profiles. President and COO Paul Otellini has been at Intel since 1974 and is tipped as a likely Barrett successor. If he is, it will be an achievement. Despite previously heading the Intel Architecture business he is the only non-technical top-level executive.

Mike Fister and accomplished Englishman abroad Sean Maloney are well-known to conference crowds the world over and are central to success given their respective responsibilities for high-end architecture such as Itanium processors and communications technology.

However, it is CTO Pat Gelsinger who currently best sums up Intel's personality. He is further proof the company promotes from within. He was a sys admin once upon a time at Intel, earned his degree while in the company's employ and seems steely beyond his years. If an 'Intel: The movie' were made, he'd be played by Gary Sinise. He's the kind of executive who goes to the gym for cardio work at 05:30 every morning and never ceases to talk tech.

That's just as well, given the current focus. "When we get to silicon, magic happens," says Gelsinger, and again it all sounds so simple. But the future technologies and uncertainties of the current market mean things look cloudier.

On a technology front, Intel admits there are players out there who can compete strongly (partly as if to say: Take note, FTC). Sun's UltraSparc processor designs and comms chips from the likes of Broadcom mean there will be no easy rides. And any downturn hurts the company. As Maloney recently put it: "We've had the world's biggest party, of course now we're going to have the world's biggest hangover."

Intel might still make most of its money from meat and potatoes Pentiums but high-end Itanium 2 server processors and small chips for PDAs and phones, now under the XScale umbrella, are hugely important for the future. XScale opens the company up to product opportunities it won't have had before but a consumer devices market that sometimes laughs in the face of rights holding content companies (http://www.silicon.com/a55478 ) is a dangerous market legally for such a cash rich, high-profile player.

Perhaps the two most amazing things about Intel are its focus on the end user and its nerve to move away from what's worked in the past. Its ability to break with the past is summed up best with Linux. Embracing the OS may make sense, as Intel seeks to sell high-end chips for Linux-based power computing, but it also shows the company won't be shackled by the past success its relationship with Microsoft brought.

Intel is still all about silicon but it is also no longer just 'that chips company'. It knows that it must change because after 30 years of success, its business isn't about to get any easier.