INTEL will curtail investment in its online services division because oflower-than-expected revenue, CEO Craig Barrett has said. Intel OnlineServices, which competes in the Web-hosting and -management market againstExodus and others, was announced with great fanfare in April 1999. Althoughthe division continues to gain customers, Mr Barrett said, "revenue percustomer was less than anticipated." As a result, the company will cut backon installing servers and other equipment in its data centers.In a conference call, Mr Barrett also termed the current economic conditiona "recession" that could continue its deepening effect in the second half ofthe year. "We're still optimistic that the second half of the year will showthe most strength, but the downside is no one knows how deep the recessionwill go," he said. Federal Reserve Chairman Alan Greenspan has yet to callthe current climate a recession. But, Mr Barrett said, "I think it's prettyclear that the manufacturing world is in pretty bad shape right now." MrBarrett's comments come on the eve of the Intel Developer Conference, atwice-yearly event dedicated to all things Intel. This year, the three-dayevent promises to be a mix of positive announcements and cautious statementsabout the future.
On the optimistic side, the Santa Clara, California-based chipmaker isexpected to announce that it has "taped out," or completed, the design phasefor "McKinley," a code name for a server chip coming in 2002. The company isalso expected to provide an update to the road map for the Pentium 4 and theXScale, an energy-efficient processor for handheld computers and cellphones. On the downside, Intel can expect to face a number of questionsabout the limping economy, slow PC demand, and the company's progress inspreading into communications, networking and other fields. Although some ofthe company's plans to diversify have borne fruit, others have not. Servicesin particular haven't proved to be a boon. Earlier this year, the companyterminated an e-commerce hosting service for small and medium-sizedbusinesses.
Last week, Intel put the lights out on Intel Media Services, a dedicatednetwork for streaming media. Intel Media Services rented air-time and otherservices to companies that wanted to broadcast stockholder meetings,training courses or other events over the Web. Intel Online Services wasinspired, in part, by Intel's ability to manage factories all over theworld. The new centers were to become "bit factories" that would processdata and conduct Internet transactions on behalf of large corporations andeven telecommunications providers. Data centers housing thousands of serverswere erected in Santa Clara, Europe and Asia. Each center costs roughly $50million to $100 million or more. Mr Barrett said the need for these types ofhosting services exists. "We still firmly believe in managed services." Inarrangement with India.CNET.com
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
