Intel Corp is entering the e-commerce data center business with its first product roll-out planned for around the turn of the year. The company says the move is part of its strategy to move beyond its core microprocessor business and will take advantage of its experience in building and managing large fabs around the world to identical specifications. Gerry Parker is the executive VP in charge of the new business unit that dreamed up the idea – his previous job was managing the fabs. Now he is managing bit factories as the company calls them.
One of the first customers will be Excite Inc, now a subsidiary of @Home Networks Inc, the internet-over cable provider. Others will be named in due course, but Intel says they can all be expected to be in the e-commerce business to some extent. Intel sees itself as central to this business and practices what it preaches, as it is on schedule to get half its revenues this fiscal year from sales made through its web site. The company was mute on capital expenditure plans or the locations beyond Santa Clara. But it did say the next center would be overseas and will follow Santa Clara almost immediately. It says it will situate them as close to the internet backbone as is practical and will deal with multiple carriers.
Intel is also starting an internal venture fund to encourage in- house development of internet-related technologies. The company is also gathering together its content service into one unit to help firms build content-rich web sites the reasoning being that the more content a site involves, the more processor cycles it eats up, therefore increasing the need for more powerful processors and so on.
