Jack Gold

Today, Intel and AMD announced that they are dropping all existing litigation between them -- AMD's persistent attacks on what it claims are Intel's predatory sales practices and Intel's counterclaims of AMD's unlawful appropriation of Intel intellectual property transferred to GlobalFoundries when AMD divested its fabs to this joint venture. The legal wrangling has been an obsession for AMD and a diversion for Intel for several years now, and neither can afford to engage in such maneuvers anymore. The settlement is a win for both, although it may not have much effect on Intel's continuing governmental antitrust investigations around the world, and the win-win may be a little different than most analysis has indicated.

Intel's payment to AMD of $1.25 billion may be seen by some as an admission of guilt that it indeed was behaving badly, as AMD claimed. However, I see this another way, namely that Intel is offering AMD a badly needed cash infusion -- a lifeline to make sure it stays afloat. Strategically, Intel cannot afford to let AMD go out of business. It needs the competition -- both to make sure it stays "paranoid" enough to design and manufacture industry-leading chips (look at what happened to Intel the last time AMD was not competitive), and also to avoid the reality of complete monopolization of the PC market and all the additional scrutiny it would entail (yes, even more than Intel is already receiving ). AMD gets much-needed cash with which it can complete its transition to a fabless semiconductor company and to complete designs of its next-generation processor and graphics chips to make it more competitive. So this is a win-win for both companies.

Monday morning, we found out that the Sun might rise again. Oracle has decided to spend approximately $7.4 billion to buy its longtime Silicon Valley neighbor. A combination of these two stalwarts, both instrumental in the rise of the Northern California high-tech power base, would signal a regretful passing of a member of the old guard. But times change and Sun did not change with them (much as Digital, Compaq, SGI, Cray and others before it). The question is, Why would Oracle, a company that has been gobbling up companies over the past few years (including Siebel, PeopleSoft and BEA), but with its own set of challenges, want to move into hardware -- a commodity, cutthroat business? The answer is it probably doesn't -- at least not directly. But this acquisition is attractive to both Oracle and Sun for different reasons, although it may not be so attractive to end-user organizations. Let's look at who gains through this acquisition, to see who the winners and losers might be.

From Oracle's perspective, an acquisition of Sun would give it control of Java and the ability to kill off an imminent threat to its database hegemony in the MySQL open-source database. Control of Java, at the core of Oracles enterprise software products and similarly for many of its competitors, would be a real coup for Oracle and Larry Ellison. This can't make IBM (or SAP) very happy, since it has also built its key business software offerings around Java. It also puts Oracle in more direct conflict with Microsoft beyond the database and into its middleware efforts with the .Net framework.

Within the next three to four years, most PC users will see their machines morph into personal supercomputers. This change will be enabled by the emergence of multicore CPUs and, perhaps more importantly, the arrival of massively parallel cores in the graphical processing units.

In fact, ATI (a division of Advanced Micro Devices) and Nvidia are already offering multiple programmable cores in their high-end discreet graphics processing platforms. These cores can be programmed to do many parallel processing tasks, resulting in dramatically better display features and functions for video, especially for gaming. But these platforms currently come at a hefty price and often require significant amounts of power, making them impractical in many laptop designs.

Palm is at a critical crossroads. It is not clear whether it can survive, let alone regain its former luster. The company that previously defined the smart-phone market has lost its way, as clearly indicated by its declining market share and lackluster financial performance. Why did this happen, and what can Palm do about it?

Palm has fallen well behind the market with its geriatric Palm OS devices and needs a good "kick in the phone" to get market share back. Even die-hard Palm fans are choosing more modern platforms. To supplement its market presence, Palm has relied on Windows Mobile devices to fill the gap, with some success. But that tactic only takes Palm so far, and it has not produced a major differentiating product for the company, especially in the consumer market. And although the Centro has been popular at the lower end of the market, it can't compete on features and functions with newer smart phones. Palm needs a competitive high-end product to compete with next-generation platforms from Symbian , Android , iPhone and so on, but right now Palm OS does not deliver a user experience or feature set close to what those platforms have.