Silicon Insider: Intel Inside Is Out

The most influential branding campaign in high-tech history is about to be retired.

And it's about time.

Word is that at this week's Consumer Electronics Show in Las Vegas, Intel will formally announce the end of the Intel Inside campaign and replace it with a new branding program called Leap Ahead, which it will support with a new company logo that puts "Intel" (without the time-honored dropped "e") into a kind of whoosh-oval.

This new logo doesn't particularly thrill me. Some ad agency probably got a lot of bucks for coming up with something that ultimately looks less progressive than the old logo. Why abandon that distinctive and memorable dropped "e"? As for Leap Ahead, I'll reserve judgment until I see the commercials, although for now it seems at best lame, and at worst like a Mao-era Chinese five-year industrial plan: The Great Leap Forward …er, Ahead!

Still, the time for something new from Intel's marketing department is long overdue. And despite an overwrought article in BusinessWeek Online that tried to create high drama out of whether retired Intel CEO Andy Grove would explode over the decision to kill one of his greatest creations -- a complete misreading of Grove, one of the most difficult but also one of the most relentlessly forward-looking and adaptive leaders in American business -- I imagine Andy's buy-in to the new campaign came pretty quickly. Intel, after some ugly missteps, has been busily remaking itself over the last couple of years -- a new CEO in Paul Otellini, new market ventures, a shift to dual-core processors, major new employee hiring. The one area left that needed serious upgrading was marketing.

But I'm not here to cast doubts on Leap Ahead. With the kind of money Intel and its strategic partners are going to put behind it, it will be a success to one degree or another. Rather, I want to use this column to honor the achievement of Intel Inside, a program many of us in Silicon Valley chuckled about at first, then came to look upon in awe. As with most things tech, even great things like the Apple II and the HP-35, Intel Inside will now fade from the scene with few goodbyes -- and soon, even fewer memories. So let this be its memorial.

Becoming a Brand Name

You know Intel Inside. Everybody does who has ever owned a personal computer, and that is a measure of just how amazing this branding campaign has been. Intel Inside, inaugurated 14 years ago, not only revolutionized marketing and branding in high technology but, given the initial obstacles it had to overcome, is arguably the most successful branding campaign of all time in any business.

To understand why, put yourself back in the world of tech in the late 1990s. In those days, the electronics industry was really a collection of distinct fiefdoms. There were mainframes and servers, personal computers, consumer electronics (mostly game players), software and semiconductors -- and rarely did they overlap. Rather, they sold their products to one another, and at the bottom of the supply chain were the comparatively few consumer products companies sold to the outside world. During this era, only a handful of tech companies -- TI, IBM's PC division, Sony, the game companies and most of all, Apple -- even knew how to sell to the general public. Apple's rainbow logo and IBM's recently retired Little Tramp character were considered the zenith of high-tech branding.

Then along came Intel Inside. It was the equivalent of a company that made piston rings trying to convince you to buy a Corvette because Chevrolet put those rings in its engines. Intel, sitting at nearly the top of the food chain, was trying to reach down, past two or three better-known intermediaries, and wave at the consumer. It was crazy -- especially when driven home by TV commercials featuring dancers in gold lamé clean-room suits -- and it was breathtakingly expensive for an industry that until then had settled for dreary B&W ads in Circuit News and Datamation. But it worked.

An Innovative Marketing Movement

Like most revolutionary ideas, the success of Intel Inside looks inevitable in retrospect: PCs, after all, are little more than containers for microprocessors -- a fact that an increasingly sophisticated audience had begun to understand. Thousands of consumers were already looking to see which Intel 80x86 processor (286, 386, 486 … ) was in the computer they planned to buy. So putting an "Intel Inside" sticker on the box was, looking back, really only meeting most consumers halfway.

Moreover, Intel was hardly new to innovative marketing. Intel Inside, in fact, had an antecedent a decade before in an equally landmark campaign called Operation Crush. Crush, led by Grove and two of my favorite people, PR legend Regis McKenna and Bill Davidow (now a famous venture capitalist), was Intel's desperate Hail Mary after Motorola caught it napping.

This was December 1979, in the early days of the microprocessor, and Intel, having run most of its competitors out of business, made the mistake of sitting on its laurels ... and looked up to find that Motorola had beaten it to the next generation of chips. Stunned, Andy Grove gathered a task force and gave it the job of saving Intel -- fast.

The Crush team had little to work with, as Intel's next generation of products was months away. The only competitive edge, it seemed, that Intel still had was the wealth of design support it offered with its chips. So the team went with that and in the process changed the very definition of a computer chip from being a mere sliver of silicon to a complete customer solution -- an utterly radical idea in those days but commonplace today.

Crush not only saved Intel; it restructured the entire semiconductor industry, putting Intel on top for a generation -- especially after an Intel salesman walked into IBM's PC division in Boca Raton, Fla., with this "solution" … and walked away with the IBM PC contract. Within five years Intel was called the most important company on earth.

Facing Increased Competition

Roll forward a dozen years, and Intel is in a different kind of trouble. It had always been a painful law of the semiconductor industry that innovative and highly profitable new chips quickly became less profitable commodities as soon as competitive parts came on the scene -- largely because there was no brand identification between one semiconductor company's products and another's. Now this cycle was getting shrunk even shorter as Intel chips, by far the dominant processors on the market, were getting attacked on all sides by "clone" chipmakers such as Advanced Micro Devices, which built chips that were as identical to Intel x86s as the law would allow.

Once again, Intel decided to take a big marketing risk, one that, if it had failed, would have chewed up much of the company's profits and compromised its ability to compete in the future. Marketing VP Dennis Carter had noticed an overseas Intel marketing campaign, created by an employee named Bill Howe, that used the catchphrase "Intel In It" over and over like a mantra.

Needless to say, Intel In It morphed into Intel Inside, and the little local ad program became, in the end, a billion-dollar global ad campaign. Intel Corp., an admired but obscure company in the most arcane of industries, had done the impossible: turned itself into a brand name as well known as Coca-Cola. And unlike Coke, Intel did it not with soda pop but with a product that few of people could describe, much less explain.

Transforming High-Tech Branding

The success of Intel Inside provoked scores of imitators, all less successful, that changed the landscape of high-tech marketing and branding forever. Of all these, perhaps the most impressive was the branding work done by Applied Materials, a semiconductor equipment company even further up the supply chain than Intel.

Intel Inside had one last lesson to teach high-tech -- the responsibility of raised expectations -- this time with its biggest failure. That came in 1994, with the infamous Pentium bug, a minor software flaw in the mathematical computation function of the Pentium chip. Bugs were common in the chip industry, and as long as you were selling to other technology companies, the usual solution was to simply notify your customers and send out a fix.

But Intel Inside had changed the game. Now the Pentium bug created a kind of mass panic. As newspapers screamed and the company's stock fell, Intel seemed paralyzed with incomprehension. Even Grove prevaricated and, worse, dismissed consumers as hysterical. Then IBM cynically announced it was suspending shipment of all its Pentium-based computers.

The whole mess lasted weeks -- until, in the smartest decision of his career, Andy Grove did an about-face and announced that Intel would replace all buggy Pentiums, and he publicly apologized. In doing so, he saved Intel once again.

The lesson? If you are going to market to consumers you need to understand that you have entered into not only a financial but a social contract with the public. The consumer market can make you very, very rich -- but if you violate that trust, it will take you years, and a fortune, to earn it back.

Intel learned that lesson, as did (with some notable exceptions) the rest of the electronics industry. And we are all better for it.

Now, having changed the world of tech so completely that we can hardly remember what it was like before, Intel Inside is out. I recommend you peel that sticker off your computer and put away that dancing clean-room worker doll: They'll be worth something someday.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michael S. Malone, once called the Boswell of Silicon Valley, is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury-News, as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, the Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is best known as the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public-television interview series, and most recently was co-producer of the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNEWS.com "Silicon Insider" columnist since 2000.

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