Intel marches into Internet services

Intel executives have disclosed plans to enter the Internet hosting services market They said at a strategy briefing session that the silicon giant will open two Internet hosting facilities with thousands of servers on the US West Coast by year's end. It will also expand to 10 or more global facilities during the next two or three years.

Intel executives have disclosed plans to enter the Internet hosting services market

They said at a strategy briefing session that the silicon giant will open two Internet hosting facilities with thousands of servers on the US West Coast by year's end. It will also expand to 10 or more global facilities during the next two or three years, according to Gerry Parker, executive vice president and general manager of Intel's New Business Group.

Intel's Internet Data Services (IDS) will target midsize to large e-commerce companies that don't want to be invaded by the armies of consultants accompanying hosting services from IBM or Electronic Data Systems (EDS), Parker said. Customers either will work directly with Intel or work with Web design agencies who partner with Intel, he said.

For instance, Intel will host the shopping service for Excite beginning in the third quarter, Parker said.

Parker and other executives pitched the move as one that leverages Intel's core competency at running large manufacturing plants. For instance, Intel has perfected the art of building production units and replicating exact copies in factories around the world, which increases efficiency and reduces management headaches. It will apply the same manufacturing principles to run the IDS.

Intel is sending out the request for proposals to the main server vendors for the thousands of servers IDS will require, and the company is looking at partnerships, acquisitions, and hiring to staff the centers, Parker said.

However, the leap into services does not portend a move away from silicon.

"It's hard to imagine that we would not be a product company," said Paul Otellini, executive vice president of Intel's architecture business group.

Indeed, Otellini used his time at the podium to lay out the following processor road map through the first half of 2000:

* Pentium III Xeon processor for servers and workstations reaching 550 MHz in the first half of 1999, 600 MHz in the second of 1999, and 700 MHz in the first half of 2000;

* Pentium III processor for mainstream PCs reaching 550 MHz the first half of 1999, 600 MHz in the second half of 1999, and 700 MHz in the second half of 2000;

* Celeron processor for "value" PCs reaching 466 MHz in the first half of 1999, 500 MHz in the second half of 1999, and staying at 500 MHz in the first half of 2000; and

* Mobile Pentium II processor for mobile PCs reaching 366 MHz in the first half of 1999, 600 MHz in the second half of 1999, and 700 MHz in the first half of 2000.

The most significant item in the road map is the fact that mobile processor speeds will reach desktop processor speeds in 2000, enabling companies to move applications such as computer aided design to notebook computers, Otellini said.

Additionally, Otellini said Intel will complete its transition to 18 micron technology in the third quarter of 2000. That is roughly two quarters faster than Intel initially indicated, according to financial analysts at the briefing.

The briefing also covered Intel's push into network services target voice and data convergence as evinced by its purchase of Shiva.

Andy Grove, chairman of the board at Intel, summarised Intel's overall strategy as providing "the standard building blocks delivered in mass-produced fashion" for operating the Internet economy.

Intel Corp., in Santa Clara, California, is at http://www.intel.com/.

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