Silicon way

There is benefit to doing things right long term rather than quick fixes to make a fast buck. But one wonders if such a thing is possible in the breakneck Internet world.
Written by Deborah Gage, Contributor

Doing the right thing can be a challenge in Silicon Valley, which is a potent mixture of idealism and greed. Even people with the best intentions can fall victim to the cycle of grabbing market share, making money and sabotaging competitors without regard for the long-term cost.

Intel's sudden decision this month to drop its NetStructure brand name—less than a week after entertaining start-ups at a dinner celebrating the brand and its possibilities—is a classic example of a high-tech dilemma. Which was more expendable: long-time OEM partners like Hewlett-Packard, upon which Intel depends to sell its processors and against which its NetStructure hosting strategy would compete? Or a couple of start-ups? The start-ups got the word from reporters.

IBM engaged in similar tactics against Transmeta, which was Silicon Valley's darling when it emerged from stealth mode last January claiming that its low-power processors would beat anything Intel could create. One week before Comdex, which is still one of the industry's great Wintel love fests, IBM suddenly and very publicly decided that Transmeta's chips were not suitable for its new ThinkPad notebooks after all.

"There wasn't a compelling reason to switch to a new brand," IBM marketing director Leo Suarez told eWeek, adding he was "happy Transmeta is in the marketplace" to wake up Intel. Transmeta announced other customers after IBM dumped it and went public anyway. So far, its stock is holding up. But in an industry that finds scorched-earth tactics an acceptable way of gaining market share, Trans meta could have a rough go—no matter how superior its technology.

Some Silicon Valley execs are making a concerted effort to do right. PacketDesign CEO Judy Estrin has launched her fourth start-up and believes she can create useful, forward-looking technology without succumbing to the temptation to make a quick buck. The ex-Cisco CTO says she's out of the product business. Instead, she is "fixing the cracks in the Internet infrastructure," and her description of all the things that need fixing is a column unto itself.

Estrin has gathered people who can bridge industry and ac ademia. They're creating technologies that they'll spin into companies in which Packet Design will invest. Their subjects include optical networking, the convergence of voice and data, and the opening of the Internet to a huge number of mobile users.

"Internet time is not an excuse not to think—we've all gotten into the mode of using it as an excuse," she told a gathering at ISPCON in San Jose earlier this month. "Remember that there are long-term economic benefits to doing things right for customers because things work in the long term—it doesn't do anybody any good when they break."

Is Estrin right? Send me an e-mail and weigh in.

Deborah Gage is industry editor of Sm@rt Partner. She can be reached at debbie_gage@ziffdavis.com.

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