SANTA CLARA, Calif., Sept 28 (Reuters) - Intel Corp.
(NASDAQ:INTC) said its first data center providing Internet hosting
services for corporate customers is up and running.
It also announced a slew of partnerships as part of its new
foray into the fast-growing Web hosting business.
The computer chip giant is investing over $1 billion to set
up data centers around the world to establish its new Internet
services hosting business, called Intel Online Services, as a
serious player in a market where it will compete with big
computer services companies and telecommunications giants.
Intel first opened a development facility in Folsom,
Calif., to perform initial stress testing on its server
configuations, to see if they could handle more and more users.
Making sure that a server or a group of servers -- a server
farm -- can handle massive amounts of new users is key for
Internet companies which run their businesses from their Web
sites.
The first big data center, located in Santa Clara across
the street from Intel's headquarters, is an 85,000 square foot
facility that has the capacity to host over 10,000 servers.
The command center of the data center looks like a command
center at NASA, with rows and rows of terminals facing 10 big
screens, where operators can monitor the status of all the
running servers, as well as keep an eye on world news.
The facilities have intense 24-hour security and
barbed-wire fencing surrounding back-up power generators.
Intel is also planning data centers for Fairfax, Va., Tokyo
and London. It said that its first data center customers
include the e-Citi unit of financial services titan Citigroup
(NYSE:C), Internet media company ExciteAtHome Corp.'s (NASDAQ:ATHM)
Shopping Service, and Japanese electronics group NEC Corp.
(TOKYO:6701).
The move is another step by Intel to diversify beyond its
core but slower-growing microprocessor business.
As part of its new focus on becoming a supplier to
different parts of the Internet economy, Intel announced in
April that it would build several data centers so that small
and medium-sized companies could easily set up electronic
commerce activities over the Internet.
"Intel has expanded its mission," said Michael Aymar, vice
president and general manager of Intel's online services
business. "We have changed our mission to be the building block
supplier of the Internet economy."
Intel has also been making big investments in its
networking communications business, where it has made about 11
acquisitions in the past two years, as it beefs up its
offerings of networking chips to make routers, switches and
other networking equipment faster and more reliable.
With its new online services business, Intel is targeting a
market that is predicted to grow to about $12 billion by the
year 2003, up from $1.5 billion this year, according to
International Data Corp. in Framingham, Mass.
"This is where people tend to think the action is going to
be going forward," said Steve Murray, an analyst with IDC.
"People have found that running these Web farms, or server
farms, for an e-commerce site gets to be a pretty complex beast
and there is a lot of hard core IT (information technology)
knowledge required, and those skills are hard to find."
Intel's Aymar said that one question he is asked frequently
is: What does Intel, the world's largest computer chip maker,
know about the data center business?
Aymar said Intel's internal global corporate network
handles two million e-mail messages a day and has 99.99 percent
uptime, and Intel's internal customer support handles 1,500
queries a day.
He said in setting up the data centers the company is
tapping into its experience of designing and building massive
chip manufacturing facilities.
Intel also announced several partnerships, including one
with UUNET, a unit of long distance provider MCI Worldcom Inc.
(NASDAQ:WCOM) for network services, and others with financial
services firm PricewaterhouseCoopers, Proxicom Inc. (NASDAQ:PXCM)
and Razorfish Inc. (NASDAQ:RAZF) for Web site development and
services. |
