Paranoia is what's inside Intel

The computer chip-maker has, like Microsoft, achieved legendary status, writes Roger Trapp

Few industries grip the public imagination like the computer business, particularly that significant chunk of it based in California's Silicon Valley. Among the most intriguing of the companies that make up this increasingly powerful sector is Intel.

Though it has recently launched consumer advertising on television, the organisation is chiefly known through the "Intel Inside" slogan generally seen as a badge of quality for personal computers. The fact that this slogan is there due to Intel's policy of paying PC makers a portion of their marketing costs if they carry it is just one of the dark and mysterious ways in which the company has become one of the industry's biggest players since being founded in 1968.

Just as Microsoft has convinced the public that, in computing, the software is generally more important than the hardware, so Intel has put across the notion that the truly significant part of the hardware is the microprocessor, or chip.

Microsoft and Intel have another thing in common: both have become so prominent in their fields that they have fought lengthy battles with the few companies prepared to take them, on and with the anti-trust authorities. Before it emerged that Microsoft faced a $1m-a-day fine from the US Justice Department over its attempt to make its Internet platform an industry standard, Intel ended its war with Digital Equipment over alleged patent infringements by agreeing to buy a sizeable part of the Massachusetts company.

Microsoft has long been the subject of books and lengthy magazine articles, but little has been known about Intel - at least until recently. But things have begun to change. As former Independent journalist Tim Jackson writes in his recently-published book Inside Intel (HarperCollins, pounds 19.99), the watershed came exactly a year ago when Andy Grove, Intel's chief executive, gave a presentation at Comdex, the computer industry's annual trade festival in Las Vegas. The appearance - "more of an all-singing, all-dancing multimedia presentation than a mere speech" - meant that the brilliant Hungarian- born engineer had arrived, says Mr Jackson. "Now he was a celebrity - celebrated on the covers of business magazines, adored by the Intel shareholders to whom he had delivered 40 per cent annual returns over his decade at the company's helm, and rich beyond most people's dreams."

The level of that fame became apparent earlier this year, when London Business School invited him to deliver a lecture. Such was the level of interest in the man who had appeared at the World Economic Forum at Davos to warn of the dangers of Europe lagging behind in technology that the school laid on extra seats.

His talk was essentially an edited version of his book, Only the Paranoid Survive, which HarperCollins published a short while before. But the audience was rapt as he talked about "strategic inflection points" - scientist's language for the rapid changes that seem to increasingly confront businesses. Since such lurches in direction can occur suddenly, the paranoia of his book's title seems well-placed. "When it comes to business, I believe in the value of paranoia. Business success contains the seeds of its own destruction. The more successful you are, the more people want a chunk of your business, and then another, and then another until there is nothing left."

This fear and determination to control events is very much apparent in Mr Jackson's book. Though Mr Grove and other founders gave little assistance, it is a not altogether negative portrait of a company battling to secure its position in an increasingly competitive industry.

Mr Grove, who is gradually bowing out of the day-to-day running of the company, would be the first to admit that the Internet, in particular, poses a number of challenges for Intel's future. But, as Mr Jackson concludes, "only brave souls will be ready to bet against Intel."