Intel Steps Up

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September 22, 1997

Intel Steps Up

Vendor announces a networking alliance with Compaq and inks software licensing deal with IBM.
By Tom Davey
ntel moved last week to strengthen its grip on key enterprise computing technologies-as the once-powerful competing Apple-IBM-Motorola PowerPC camp appeared increasingly marginalized.
Intel announced an alliance with Compaq Computer for joint development of networking products, including Gigabit Ethernet technology. The company also announced guidelines for hardware and software makers that will ensure that notebooks will be able to use future generations of Intel's chips. And Intel stepped up the pace in the production of flash memory, a technology used in PCs and other devices, by doubling the capacity of its previous chips. This week, it's expected to license PC-management software from IBM for distribution to the industry.
The Intel-Compaq networking effort is intended to set standards and create products for Fast Ethernet, Gigabit Ethernet, and other technologies, initially for the server market. The two companies will cross-license technology and plan to announce the alliance's first product in 90 to 120 days.
Both companies have been pushing hard into some of the same networking markets. "The benefit we get [from this alliance] will outweigh any overlap," says Greg Lang, business unit manager in Intel's network products division.The aggressive Intel unit has already helped drive down prices for low-end switches, hubs, and network interface cards.
IBM is expected to announce this week that Intel is licensing IBM's technology for use in its Wired For Management initiative for easier PC management. It's also meant to help stifle the threat of the network computer. Intel will use IBM's LAN Client Control Manager and other software that lets IS managers remotely update PC BIOS and other software, says Judy Smolski, general manager of customer integration offerings for the IBM PC Co.
Smolski says that while IBM will get first access to the technology, the distribution deal with Intel will enable the technology to become an industry standard. Last year, Intel licensed IBM's Wake-On-LAN in a similar deal.
Last week, Intel unveiled a road map for technology expected to appear in notebooks over the next two years-along with strict power-management guidelines to ensure that battery limitations don't stop PC makers' adoption of the technology.
Intel says mainstream notebooks next year will include the latest desktop technology, such as Pentium II processors and DVD-ROM drives, plus 3-D graphics and the ability to play high-quality MPEG2 video without extra decoder chips. Guidelines are needed because the power demands of these technologies ar e increasing fast, with heat output growing correspondingly. Meanwhile, batteries improve at a snail's pace. "There's only so much heat we can move out of a box," says Stephen Nachtsheim, Intel's general manager of mobile products. "And battery capacity has been growing only 5% to 10% a year."
Intel last week announced a new technique to increase the capacity of flash memory, a type of memory that retains data after power is turned off. Flash is used in PCs to store BIOS code and in portable products such as cellular phones. Intel's development lets each memory cell hold 2 bits of data instead of 1 bit, doubling memory capacity. "We have 3-bit-per-cell technology working in our labs," says Greg Atwood, the technology's inventor.
Intel's successes provide a stark contrast with the declining fortunes of the Apple-IBM-Motorola PowerPC camp-established in 1991 as the AIM alliance-which was once touted as a potential competitor to Intel's dominance. The slow growth of the Macintosh market is driving Powe rPC vendors IBM and Motorola to seek growth in niche markets for high-end and embedded systems.
The alliance's goal was to create chips that would surpass Intel's performance and would power Apple-licensed Macintosh clones and other systems based on a new specification called the common hardware reference platform (CHRP). But industry support dwindled and Apple has now effectively killed the clone market and CHRP. "CHRP is dead, dead, dead," says an IBM source.
The failure of those initiatives has taught one Mac user a lesson about vendor promises. "I've learned to plan budgets based on what's available now or extremely close to reality," says John Papa, IS manager at the Carson Group, a New York financial consulting firm.
Still, IBM and Motorola officials stress their long-term commitment to the PowerPC chip. They say they will announce details at the end of this month on how they'll pursue embedded systems markets. However, some analysts speculate Motorola will eventually bow out of PowerPC dev elopment and leave it to IBM, which can supply chips for Apple and its own RS/6000 and AS/400 workstation and server lines.
IBM will introduce a 64-bit PowerPC chip called the 630 next month that will be used in IBM's high-end RS/6000 SP, sources say.
Motorola plans include its G4 line in 1999, which will compete with Intel's forthcoming Merced chip, says Will Swearingen, worldwide marketing manager for PowerPC at Motorola.
One PowerPC processor that won't arrive is a 533-MHz chip planned by Exponential Technology Inc. The chipmaker filed a $500 million lawsuit against Apple last week, alleging Apple forced Exponential out of business by refusing to honor purchasing agreements and tying up its ability to supply chips to Mac clone makers. Jack Douglas, Apple's general counsel, says Apple is preparing a response to the suit. "The case," he says, "is without merit."
-with additional reporting by Mary Hayes , Bob Francis , Jeff Sweat , and Monua Janah

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