Interesting commentary on the Intel/Rambus linkup..................
This is not totally unrelated to CUBE, at least as far as PC-DVD is concerned. Maybe it's time to buy RMBS (actually, 60 days ago was a better time). Consider what it means to the company when Intel makes it the de facto memory interface standard for PCs.
www8.zdnet.com
August 1, 1997
Inside Track
John C. Dvorak
Memory chip makers are up in arms about recent deals between Rambus and Intel, claiming that Intel is making another run at cornering the memory market, as it had attempted in late 1995.
What's happening is that Intel is locking vendors out of the specification development in such a way that it can bring high-performance Rambus-based systems on the market before its competitors get hold of the specifications. Rambus is essentially command-driven smart memory that coordinates with the CPU more cooperatively than old-fashioned "dumb" memory. It's argued that this type of memory design is necessary in high-speed machines. But some see Intel's plan more as a marketing strategy than a technology. It is believed that Intel can synchronize certain microprocessor chip designs with new memory technologies in such a way that by changing certain specifications on the fly, this technology can ruin the performance of Cyrix, AMD, and even Motorola-based systems while improving its own. In other words, change parameters and protocols at a critical moment after other processor houses have committed to an earlier design.
Currently Intel controls the microprocessor market, the support chip set market, and the motherboard market. It now sees the memory market as another one in which it should profit. But Intel has no reason to go into manufacturing memory if it can just get a piece of the memory makers' pie. It will simply charge a royalty to memory makers to use the Rambus technology. And that royalty may be as high as 6 percent of sales--a healthy chunk. Furthermore, it's rumored that just to get into the Rambus bed, a memory maker might have to put up a $3 million to $6 million "tribute."
This whole deal essentially takes much of the profit and gives it to Intel/Rambus. Intel likes the idea of licensing as much of the computer as it can. You have to wonder what ever happened to "open systems." The PC is becoming more like a Nintendo. The Slot 1 technology needed for the Pentium II, for example, will also be licensed to siphon profits away from motherboard makers that compete with Intel. You can see why the K6 is so appealing to smaller players with its Socket 7 compatibility.
This Rambus situation is the worst, though, according to sources inside the memory business. To counter this threat, an ad hoc specification for a Rambus-like architecture is being developed in a hurry. This is called Synclink DRAM (SLDRAM), and information can be found at www.scizzl.com. This site opened originally to promote what is called the "The Scalable Coherent Interface (Local Area MultiProcessor)." According to the site, this "is effectively a combination computer backplane bus, processor memory bus, I/O bus, high-performance switch, packet switch, ring, mesh, local area network, optical network, parallel bus, serial bus, information sharing and information communication system that provides distributed directory-based cache coherency for a global shared-memory model and uses electrical or fiber optic point-to-point unidirectional cables of various widths." What a mouthful. This alone will keep you reading for hours.
The SLDRAM Consortium includes all the memory makers as well as Apple, IBM, Motorola, and most other semiconductor makers except Intel. Whether this crowd can get anywhere remains to be seen. Anyone who watched the VESA-bus folk get decimated by Intel's PCI bus will understand Intel's momentum. PCI blew away not only VESA but ISA and EISA, too.
The only reason that readers should be concerned about any of this is that heavy licensing and the movement toward a proprietary architecture always means one thing--higher prices.
Personally, I don't understand why the Intel folks don't simply bring out a proprietary system and get it over with. And maybe they will--in the form of a Gateway 2000 buyout!
Here's the story: Compaq recently attempted to buy Gateway. Everyone in the business knows what went down and what's happening. No matter what they tell you, the fact is Compaq offered $5 billion for the company; Gateway refused. Then Compaq offered $7 billion; Gateway again refused. Compaq felt insulted, looked around, and thought about buying Micron. Now we hear it is putting together a huge direct-sales operation and expanding internally, all at the cost of $1 billion. Its targets are Gateway and Dell.
There's speculation as to why Gateway wouldn't sell at what everyone thinks was an excellent price. I suspect that Intel is somehow in this picture. First of all, Intel has no love for Compaq. Compaq still refuses to use the Intel motherboard and designs. Compaq also was an early investor in NexGen, which designed the K6 and has since been bought by AMD. Intel doesn't like the idea that Compaq is big and powerful, and doesn't want to see it any bigger.
Intel may have sweetened its prices with Gateway to keep the latter from accepting Compaq's offers, or it may actually have an offer on the table to buy Gateway. Intel is one beat away from bringing out a branded machine, but it just can't seem to take the last step. Buying Gateway may be that step. The deal may be in the works.
Recently Compaq attempted to buy Gateway 2000, offering as much as $7 billion. Gateway refused the offers. Now Intel may have an offer on the table to purchase Gateway so that it can have its own branded machine. |
