Network-appliance market last year totaled $2.4 billion and will jump to $17.8 billion in 2004. 725 % increase in network appliance market in 48 months. insp will get the biggest piece of this market. I'll post the cell phone market data later. The market is awesome.
Inktomi is trading at a larger value, I don't think insp should be worth less than INKT. Both stocks are recently getting buy ratings.
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3/17/00 - Intel strikes at both ends -- Takes on customers with its own brand of network servers
Mar. 17, 2000 (Electronic Buyers News - CMP via COMTEX) -- Intel Corp. this month will begin shipping its first network-server box under its own label, as the microprocessor giant turns OEM to keep up with the exploding new market.
Intel is billing the platform as its NetStructure product line, though its competitors refer to the systems more often as network-appliance or cache servers. Semantics aside, Intel's first box is one of seven that the company eventually plans to ship under its own brand.
Though it's not a stranger to the OEM market-having long manufactured PC motherboards and white boxes for third-party resellers-Intel's latest foray will pit it against some of its largest processor customers, most notably stalwart supporter Dell Computer Corp., Round Rock, Texas, which makes the Power Edge cache server.
Why would a company, even one as powerful as Intel, risk incurring the wrath of its customer base by fielding competing products? It's because to date many OEMs have spurned the chips Intel has designed for the network-server segment, according to observers. And that unfulfilled business is threatening to leave Intel on the outside looking in on a booming new industry.
In a sign of just how far the company would go to build share in the network-server market, Intel's new cache server is using the X86 Solaris operating system of archrival Sun Microsystems Inc. Analysts said Intel was left with little choice of OSes, given that it's porting applications caching software from Foster City, Calif.-based Inktomi Corp., which supports Sun's network servers.
While observers were quick to note the competitive implications of Intel's latest push, the company played down any brewing rivalry by saying that its new platform is actually a "communications system." However, a spokesman for Inktomi said the company's software is developed specifically for network-appliance servers, including cache-server applications.
In any case, Intel's loosely labeled boxes are single-purpose, application-specific, front-end servers that sit in front of a larger server complex. In a roughly analogous sense, the new breed of network-appliance servers perform the same function as the cache in a PC. While server farms operate like main memory by performing the heavy lifting for, say, an Internet service provider, a smaller number of network-appliance servers are tied to specific, frequently used Internet functions such as e-mail, e-business data acceleration, data caching, and Web-page hosting.
Bryan Ma, an analyst at Framingham, Mass.-based IDC, said the network-appliance market last year totaled $2.4 billion and will jump to $17.8 billion in 2004. The cache-server subsegment is expected to grow from $600 million this year to $2.2 billion in 2002, according to Internet Research Group, Los Altos, Calif.
Intel was in danger "of missing the boat," said Peter Christy, an analyst with IRG. "Intel sees network-appliance servers as a huge volume market, where they don't want to give up any competitive edge," Christy said. "Even though they're coming late into the market, Intel will make its usual huge marketing push to muscle in."
Indeed, the company's OEM approach betrays an inability to dominate the network-appliance server market in the same way it has the PC space. Dell and Compaq Computer Corp. use Intel's Pentium chips in their cache servers. A Dell spokeswoman declined to comment on Intel's entry into the front-end server market or indicate whether Dell perceives Intel's move as an attempt to compete head-on with the Power Edge.
Hewlett-Packard Co. buys its cache servers from CacheFlow Inc., which HP then resells under its label. Gateway Inc. relabels cache-server boxes that it acquires from Mountain View, Calif.-based Cobalt Networks Inc., which use MIPS CPUs designed by QED Inc.
Cobalt also markets a line of front-end servers with K6-II processors made by Advanced Micro Devices Inc. for ISP customers.
Another large non-Intel front-end server OEM is Network Appliance Inc., Sunnyvale, which uses the Alpha microprocessor design built by Samsung Electronics Co. Ltd. A spokesman said the company wasn't worried about Intel joining the market, because it's "growing so fast there is room for many players."
While Intel's other OEM efforts are somewhat arm's-length affairs, its entry into the server-system market has all the trappings of a full frontal assault, according to observers.
The company will fabricate all the motherboards for its new NetStructure units, an Intel spokesman said. Intel subsidiary iPivot Inc., San Diego, a producer of e-commerce front-end servers, will assemble the systems. As it does with its PC products, Intel will sell cache-server boards and white boxes to OEMs for relabeling, the spokesman said.
The Santa Clara, Calif., company's OEM-server strategy fits well with its overall plan to build its networking and Internet-business operations, said Bert McComas, an analyst with InQuest Inc., Gilbert, Ariz.
On the services side, companies availing themselves of Intel's Internet-hosting centers, for example, are expected to use the cache servers. Intel will also use its presence in the server market to boost the sale of its network-processor, LAN-chip, and telecommunications-IC products, all of which are used in routers, switches, and network systems that link to the front-end appliance servers, McComas said. |
