The good news: Five stars for a serviceable and needed popular story of one the most iconic companies and business teams in the history of Silicon Valley. The bios of Noyce, Moore and Grove side-by-side make a great story. The interpersonal dynamics of the founding team was fascinating. The Fairchild-to-Intel-to-memory business-to microprocessor story is well told.
The bad news: Two stars as Malone has very little insight into the damage Andy Grove and his successors did to microprocessor innovation in Silicon Valley.
The main thread of the book is the attribution of Intel's success due to a troika of great management, the pursuit of "Moores Law" and Andy Grove's relentless pursuit of operational execution. While that makes a great popular novel and a good read, that's so wrong as to make the rest of his conclusions painful to read.
The reality was that regardless of technology innovation and management skill, Intel's dominant position was equal parts technology innovator as it was ruthless monopolist. It used its monopoly power to strangle emerging competition and destroy existing ones to dominate the industry for the last 3 decades. Its failure to innovate in new markets in the 21st century is a direct result of its reliance on predatory pricing and exclusionary behavior.
Referring to the early days of the semiconductor business Malone says, "There was another anarchic force defining the semiconductor industry during these years: lawlessness....That competition often crossed the line into what would usually be considered unethical, even illegal, behavior..." but Malone never connects lawlessness to Grove's need to win at all costs. So much so that Grove institutionalized decades of Intel wining through threats, intimidation, and predatory tactics.
These were not one-time events and contrary to the books premise it wasn't just Grove's obsession with AMD, it was his antipathy to any competitor, big or small.They were not behaviors of the early days that the company outgrew. In fact the record is clear that as Intel gained share it continued to use its monopoly power in ever increasing ways.
Just one example: Malone misunderstood the Intel Inside campaign. It wasn't just a consumer branding strategy. First and foremost it was a predatory marketing campaign that turned into exclusionary behavior. PC firms that used Intel chips and put Intel Inside on their PC's were given funds to use in advertising and were reimbursed for "marketing expenses". In reality these marketing funds were actually a subsidy/discount (some would say kickback) on Intel chips. As Intel's power grew they would only give the PC manufacturers rebates if they would buy 95% of their Microprocessors from Intel. If they used AMD or other microprocessors - all the Intel rebates would disappear. By the end of the 1990s, Intel had spent more than $7 billion on the Intel Inside campaign and had 2,700 PC firms locked up. By 2001 these rebates were running $1.5 billion a year.
None of this information is hard to find. Intel has been sued in Japan (for offering money to NEC, Fujitsu, Toshiba, Sony, and Hitachi,) in the EU (for paying German retailers to sell Intel PC's only) and in the U.S. for predatory (pricing), exclusionary behavior, and the abuse of a dominant position (HP, Dell, Sony, Toshiba, Gateway and Hitachi.) The legal record is pretty clear that Intel used payments, marketing loyalty rebates and threats to persuade computer manufacturers, including Dell and Hewlett-Packard (HP), to limit their use of AMD processors. U.S. antitrust authorities have focused on whether the loyalty rebates used by Intel were a predatory device in violation of the Sherman Act. The European Commission (EC) has brought similar charges and imposed a 1.06 billion Euros fine on Intel for abuse of a dominant position.
The sum of these efforts not only killed competitors but it killed innovation in microprocessor design outside of Intel for decades
The Justice Department went after Microsoft because it was a more visible and understandable target. But both Microsoft and Intel were acting in an equally rapacious behavior.
It's hard to tell why Malone glosses over all of this. Was it, "too close to the source" or perhaps the facts didn't comfortably fit his narrative.
In either case the lack of this "Intel as a monopolist" narrative misses the Shakespearean tragedy of Andy Grove's legacy. It was Grove's dominance - at any cost - of the microprocessor market that blinded him and his successors to the coming of the mobile and tablet markets. Barrett and Ottellini inherited a culture of locking down an existing market while its competitors innovated outside of it.
The tragedy is that Malone lost the opportunity to ask Grove, "Was Intel's lack of innovation in the 21st century is a direct result of its 20th century policy of being a monopolist?"
A now reflective Andy Grove might have given him an answer he didn't expect.