Top Ten Reasons Why Rambus Will Sue Intel
11/2/00
By Phil Trent
Craig Barrett is angry with Rambus RDRAM performance, cost, and the lawsuits against RAM makers.
1. Intel is preparing to dump Rambus at the first opportunity.
Craig Barrett is understandably angry with Rambus RDRAM performance and cost, as well as the lawsuits against ram makers. Just like the mythical troll, you pay the toll, or else. Admitting Rambus is a mistake is like a building collapsing under its own weight and then someone mentioning that the building might not have been stable. Duh. Some credit must be given to Mr. Barrett for admitting a mistake. Perhaps Intel is not as doomed as many might think. I admire Intel's investors -- such optimism in the face of disasters and AMD's dominance for the foreseeable future in the high-end desktop is very admirable.
2. Rambus' RDRAM is both slower and more expensive than DDR.
Has anyone seen a hardware benchmarking site that does not acknowledge DDR's superiority over Rambus? This translates to Rambus' products being obsolete and unneeded after the P4 weans itself from its sickly symbiotic companion.
3. Intel will have to break its agreement with Rambus or cede the entire motherboard chipset market to Via.
Via is in the middle of an Oklahoma style market share grab. They have already staked their claim on PC133 and are moving rapidly towards DDR. DDR is even more open to Via. . Intel was upset with Via's progress with PC133 as well as their support for AMD. They gave other reasons, but I really don't think PR spin is as powerful in the post-Internet world. It is difficult for journalists and PR staff to absorb the paradigm as many, if not most, of the average readers are more educated than the writer on technical topics.
Intel's agreement with Rambus states that Intel cannot make a DDR chipset unless certain conditions are met, or until 2003. Why is it that the image of the classic Microsoft-IBM DOS deal come to mind? Intel can either commit a material breach of contract, or face extinction in the chipset market. Even Intel will have a difficult time selling poor performance at a higher price (well, they are doing it now.) Intel needs DDR, or it will be living in the lower-class performance chipset arena for the foreseeable future. Intel would hate to lose this leverage over motherboard makers. Not long ago, Intel used this leverage to make these makers gun-shy of promoting AMD motherboards for a while. By insinuating that Intel might cause a "shortage" of chipsets to m/b makers who supported AMD openly, Intel was effective for a brief period of time in staving off the Athlon. Intel was perhaps hoping this would buy them some needed time to at least have the appearance of continual dominance.
4. As Rambus stock goes lower, Intel will not be as apt to hold on to obsolete RDRAM to cash in on their stock options.
Intel has or had exercisable options of 10 million shares at $10 a share. To clarify, if Rambus' stock price were $110 dollars and Intel could somehow sell the whole lot at that price, Intel would pocket a cool $1 Billion. (Not that a billion goes as far as it used to.)
5. Craig Barrett called Rambus a "mistake"
This open admission caused quite a stir among investors, analysts, and the media. It is especially biting because (ok, now for the rumors part) at least some engineers working at the hollowed halls of Intel were openly opposed to Rambus, and were castigated by Intel's upper management.
6. Except for Sony's Playstation 2, Rambus' business model is crumbling.
It looks like all hands are jumping the RDRAM ship, save a few. It is really amazing that RDRAM ended up in the Playstation 2, given Sony's cost restraints. Even though RDRAM's price is just now coming down to unreasonable levels (from just plain intolerable), it looks like by the time RDRAM's price gets down to a reasonable level, it will be close to worthless.
7. Rambus is turning from an IP (intellectual property) house to an LP (lawsuits pending).
A multitude of lawsuits is the quintessential pattern of companies right before they go under. Intel is clearly uncomfortable with their Monster terrorizing the tech neighborhood. Robert DiNiro said of fire (in the movie Backdraft,) "To kill it, you have to love it a little." Intel does love it a little, and seems to be the only one who can kill it. Certainly, Intel has fallen into a situation of codependency and hatred -- all the preparations of a nasty divorce or a two-term presidency that ends in shame and lost confidence. Speaking of politics, my vote is going to Al Gore, the self-proclaimed "Father of the Internet." Who else could have claimed to have invented something twenty years after the fact and still be even close to George W. in the polls? Gore seems to have some sick compulsion to make stuff up.
At least Bill Clinton tells lies for a reason. Hmm, I wonder if he would have lied if it had been Claudia Schiffer instead of Monica Lewinsky? I think he would have been proud and hailed it as the crowing achievement of his Presidency. Just think what those Middle East talks would have been like; Clinton would have been spinning bawdy yarns for the duration of his visit, while Middle-Eastern despots listened with rapt attention. Umm... ok, let's get back on track here. I must the king of tangential meandering.
8. They are proven backstabbers -- just ask any member of JEDEC.
JEDEC is a body that helps determine ram standards. They have rules that you must disclose current and pending patents. To be sure, when the lawsuits break out in the tech world, everyone seems to be wearing each other's shoes. The patent office doesn't seem to have enough expertise to understand what they are granting. I once looked up a patent on a tire-pressure indicator. There were about a dozen patents that were essentially the same. This is going to get real ugly, real quick. Rambus has gambled by opening up Pandora's Box. I hope that Infineon and Micron slap them around a bit before Rambus follows Iridium to that great corporate beyond.
It is only a matter of time 'till Intel has outlived its usefulness to Rambus and their lawyers-on-retainer will once again earn their keep. The lawyers will always be here with us to right wrongs and make wrongs depending on who is paying the bills. The first thing they teach in law school is right and wrong, like beauty, is in the eye of the beholder. Debating is the art of arguing for something you don't believe in which is an anathema to morality.
9. If you can't compete, coerce. If you can't coerce, sue.
Rambus is really trying to put the heat on ram manufacturers. SDRAM standards had been open, but Rambus' failure with RDRAM causes them to rethink their strategy. You know what they say, when at first you don't succeed, sue and sue again. Rambus has already tipped their hat on their attitude of lawsuits and Intel should be forewarned. Intel is Rambus' hunting buddy now, but when too much beer and too few squirrels (http://www.deadsquirrel.com ) make an appearance, Intel just might be ripe for one of those infamous "hunting accidents." I usually know when hunting season starts because it usually kicks off by some inebriated hunter thinking his orange-vested companion looked like a 12-point buck.
10. What memory maker is likely to adopt Rambus' next memory standard?
I'd say many ram manufacturers feel like an abused wife whose spouse is trying to get her to come back. "I'll change," will be Rambus' mantra, but somehow I don't think JEDEC is going to let Rambus sit in on any more meetings. Period. All this spells RDRAM pricing to be high. Also, is it outrageous to think of the possibly that RDRAM could be discontinued within a year from now? This would leave several P3 and soon-to-be P4 owners extremely unhappy. There are two types to fear: the greedy and the desperate. Will Rambus' desperation cause them to sue if Intel tries to violate their agreement not to produce DDR? What a spooky thought to end on at Halloween -- boo!
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