Intel is smarter than Microsoft or IBM

Use your brain, not your big mouth

Intel logoLAST WEEK, INTEL proved they were much smarter than Microsoft and IBM when they put out a widely ignored press release about an administrative motion with the FTC. While the text said next to nothing, the actions behind it had immense ramifications, especially if you are an Intel stockholder.

The particulars of the FTC action against Intel are not the point of this discussion, whether or not you feel Intel is innocent, guilty, unfairly picked upon, or secretly enjoys killing kittens, put it aside and focus only on how they are handling the matter. It is corporate brilliance that points out how unwieldy and plodding Microsoft and IBM are. Intel also shows why it is better to do than to shout, especially when you don’t have a leg to stand on like some other companies.

If you recall, IBM had one of those decades in the 1970s, and the bleeding didn’t stop until after the 1980s. Many contend Big Blue is still negatively affected almost 40 years later. Law suits, FTC actions, consent decrees and various other lawyerly pursuits hobbled the company for decades. Management time was eaten up, normally aggressive people and technologies were second guessed, reigned in and in general, the company lost it’s way. It wasn’t pretty.

Microsoft on the other hand got up on their bully pulpit, banged their drums while fighting the FTC and others publicly. Considering they were found guilty, it was probably a waste of time, money, executive bandwidth, and what little goodwill the company had in the eyes of their customers. Luckily, the American legal system allowed MS to get away with a slap on the wrist in exchange for a few well timed campaign contributions. It is amazing what regime change can bring if you are in a position to afford the tab.

In any case, the case wasn’t settled quietly, it was done publicly. MS executives ended up looking, well, not exactly honest. The company had it’s dirty laundry publicly aired, and several follow up actions, decrees, and violations thereof have once again hobbled the company. More than a decade later MS is lost and rudderless, but still quite boisterous.

IBM and Microsoft both fought the law, and the law won. Maybe not directly, and much of it got overturned, but looking at the end result, you have to question the wisdom of the path taken. Both companies ended up with decades of managers looking over their shoulders ever time they were asked if they wanted to go out for dinner.

The bar was lowered for similar actions by other companies, governments, and organizations. In general, both companies ended up with the metaphorical equivalent of a black eye and ‘kick me’ signs tattooed on their backs. MS is still walking on proverbial eggshells, and the actions that lead them to the sorry state they are in can’t be far from any execs mind. IBM is in much better shape, but unlike MS, they seem to have the capacity to learn from their mistakes.

That brings us back to Intel. Last year, they settled their long running suit with AMD. They did so quietly, but the $1.25 Billion that Intel paid AMD, along with a few nebulous settlement terms, made headlines. The majority of the documents, depositions, statements, and settlement terms are not public, and almost assuredly never will be. AMD is satisfied, and Intel is a bit sore on the backside, but the matter is over. Intel took a hit for one quarter, and stockholders understand that it is a one time cost.

There were similar settlements in South Korea, Japan and somewhat less tidy goings on in the EU too. With two actions settled, and the remaining EU appeals being handled more quietly and diplomatically than anything MS or IBM ever thought to try.

Minutes before the AMD suit was settled, New York state took aim at Intel, and then the FTC weighed in, egged on at times by companies with no legal leg to stand on, but no shortages of axes to grind.

As we pointed out last December, of the three main charges against Intel two are likely FTC slam dunks, and the other will get laughed out the door. Regardless of what you think the merits of the case are, even if Intel fights and wins on every count, there are three things that are guaranteed to happen. First, the company will spend a lot of money, millions and millions of dollars, funding large cars, larger boats, and even larger mansions for several legal teams. This will not be a cheap or short fight.

Second, they will have their dirty laundry, valid or not, turned into sound bytes, selectively quoted, and purposely taken out of context for the yellow press. (Editors note: While our logo is mainly blue/grey……) It will take up enormous amounts of executive time and energy, and cause the same distractions that ended up causing problems for IBM and Microsoft.

Third, and worst of all, there could be one of those nebulous consent decrees hung around their necks like millstones. Worse than a kick me tattoo, these end up being hand lettered invitations on fine paper inviting just about anyone to sue Intel. Because of the history, it also puts the company at a huge disadvantage before the fight even starts. Some of the consent decrees can last for over a decade, MS is finding that fallout is still landing on their head with a sickening thud.

If a company fights a case of this magnitude, it will almost assuredly result in the three problems above. Win, lose, draw, or infinite appeal, it doesn’t matter. Memos, emails, videos and depositions will be leaked to the press with regularity, and even a company as large as Intel can be nibbled to death by ducks.

This is where Intel executives proved they were smarter than the average Fortune 500 CxO, they are looking to settle. When things like this are settled, the overwhelming majority of the settlement is sealed, as is most of the evidence, and the case is over. Total time spent ends up at less than a year.

Intel may write a check for billions of dollars, or they might walk away with no monetary fines, we may never know. The aforementioned dirty laundry won’t be aired, and the executive bandwidth will not be spent on lawyer enriching pastimes, it will be spent on running the company. Best of all, the bleeding will be stopped, and the circling vultures will go away without a carcass to pick at. If they want a free lunch, they will have to wait until the FTC bus runs over another Fortune 500 critter.

Whether Intel considers the settlement a win, lose or draw, we will likely never know for sure, it will be spun as a win even if the executive team has to give up their first born children. The majority of the settlement will almost assuredly be kept under lock and key too, with only a press release talking about how both sides are happy, Intel paid a fine of X dollars, and agreed to do things they claim they didn’t do anyway.

Everyone will smile, shake hands, pose for pictures, and go home. When they do, and the spouse asks them what they want for dinner, Intel CxOs heads won’t swivel to look for lawyers or tape recorders. It will be over. IBM and Microsoft, to one extent or another, will still be living with the fallout.

Intel smiled, may take a one time hit, and move on. They are without a doubt the most canny tech company out there, and the FTC talks show exactly why. Even if the talks fall through, and a lengthly trial does ensue, history will show that Intel is the only one of the three that tried to use their heads instead of their big mouths.S|A

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Charlie Demerjian

Roving engine of chaos and snide remarks at SemiAccurate
Charlie Demerjian is the founder of Stone Arch Networking Services and is a technology news site; addressing hardware design, software selection, customization, securing and maintenance, with over one million views per month. He is a technologist and analyst specializing in semiconductors, system and network architecture. As head writer of, he regularly advises writers, analysts, and industry executives on technical matters and long lead industry trends. Charlie is also a council member with Gerson Lehman Group. FullyAccurate