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Technology Stocks : Intel Corporation (INTC)

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To: rudedog who wrote (57485)	6/8/1998 1:48:00 PM
From: Paul Engel	Read Replies (2) of 186894

rudedog - Re: "our attitude reminds me a little of IBM's attitude about the early clone vendors in 1983. Instead of looking at all the ways that someone might succeed in competition for IBM's PC business (a business they had nearly 90% of at that point), IBM spent time looking at all of the reasons why the clones could not succeed. They did almost nothing proactive to protect the future of their PC business. " This is a fair observation. But let's look at Intel. The Merced is delayed so the BIG SERVER market is up for grabs. Intel is currently doing well with their high volume/low end servers based on the Pentium Pro. To reach into the next higher level of performance, the Pentium II XEON will be introduced in just a few weeks. How will SMP systems with 2 or 4 XEONS compare to the performance of DEC Alpha servers and what will be the comparative costs? Intel will not be stopping with the Xeons - 450 MHz and 500 MHz versions will follow in the latter part of this year. Further, Intel will be rolling out Profusion-based 8-way servers in the latter part of this year as well. Down the road - 1999 - Wlillamette will be introduced and a major improvement in server and workstation performance will be delivered. My observation is that Intel continues to offer excellent products with exceptional price/performance capabilities in the server "space". Well Alpha still sell? Of course - there are applications that Alpha servers exceed the performance of Intel servers - but they carry a hefty cost. Perhaps you can detail the cost structure of Alpha's server product line. Intel will be delayed in the very high end server arena but customers need to make a major strategy change to shift their corporate server roadmap to Alpha. Some will do this but many will choose to find more compelling "mainstream" solutions based on non-Alpha hardware. Don't forget - DEC unloaded the Alpha production to Intel BEFORE the Compaq deal came along. That sent a wake up call to Alpha customers and potential Alpha customers. DEC laid out a strategic roadmap and that roadmap was the road to Merced. (Recently closed for further maintenance). Paul

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