here is what Intel says about the Data Center business:
Timothy Arcuri
Navin, I had a question for you. And there seems to me a little bit of different tone between what we hear from your cloud customer, the compute guys, you and the memory guys, are seeing weakness but the networking company still sound fine. So is it just an inventory digestion of computer and servers, or is there something structurally happening there?
Navin Shenoy
I think as Bob said and I think we've talked about a little bit. We had three quarters and really, really strong growth in 2018 in the cloud, and that was driven by product cycle, as well as the typical multiyear build out pattern with Xeon scalable. And if you look back at all the historical trends we have had in the cloud business, we've always said there is some lumpiness to the business, and there is periods where people build and then there's periods where people consume. The signals we get from our customers is period of build for compute is going to shift now to a period of consumption, and that started in the second half in the fourth quarter and we expect that to continue through the first half of the year.
Secularly over the long-term, meaning in the long-term, the cloud business is going to continue to grow. There's no doubt about that. Both the consumer cloud and the enterprise commercial cloud, we see both of those continue to grow. And the appetite for compute I think is somewhat insatiable. Bob talked about compute cycle growth. Our five year forecast for compute cycle growth or MIPS growth is 50% CAGR over the next five years. And I see nothing slowing that down over the next number of years. So that'd be how I answer that one.
Bob Swan
Maybe if I could just close out, Mark. We think 2018 was a great year. Our strategically what it is we're trying to do and the opportunities we see are as strong if not stronger today heading forward as they've ever been. We think '19 for us is going to be another record year. At the same time, we realized that first quarter is just going to be lower and the practical reality is we got -- we think we have a reasonably good read on the level of inventory that's in the ecosystem. I'd say this particularly for -- we’re getting better and better on the Diagnostics around the DCG business. The Q4 to Q1 dynamics for DCG historically have been sequentially down 8% to 10%. And the practical reality is as we see it now is that could be double in the first quarter. But that has nothing to do with the strength of the business, the product line portfolio we have coming and our excitement about delivering a real strong 2019 as we go forward. So thank you very much for joining us. And I'm sure we'll talk to you soon.
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