Carl, >Maybe Tony Viola with his literary skill will give SI a report of the meeting....
Ask and ye shall receive.
Meeting start delayed until 10:10 because Andy was waiting on word of the split. Audience cheered when told.
Introduced BOD. Max Palevsky is retiring as board emeritus member. Founder of Scientific Data Systems (I remember them with their skyrocketing stock price, then Xerox bought them). Andy said Max was the one guy that kept harping at the guys at Intel, that their CPU knowledge was "severely lacking" or something like that. Intel started as a company making memory chips (1K) so they weren't computer wizards in the beginning. Andy said Max finally backed off years later, saying Andy had reached computer guru status.
10 billion shares now approved (was 4.5 billion).
This year's meeting was completely geared around the Internet (without forgetting the core business, of course) and you got the feeling, as Andy and Craig went through the complete product lineup, that Intel does have a terrific overall offering for Internet support.
Some stats: Internet users are multiplying by a factor of 10 every 5 years; BTB commerce 10X every 3 years, expecting $10 Trillion by 2004. Andy mentioned a favorite search engine, Google (I use them too), as getting up to 10 million hits a day. Google's CEO has said they're adding 30 Intel servers a DAY. That's little old GOOGLE!
PCs aren't dead. Growth was 15% in 1998, 20% in 1999 (IDC) and 2000 looking like 1999 or better. Growth expected to continue like that further out.
A guy named Steve Young (not that one) walked by and described briefly about 50 Intel products that were lined up on the front of the stage, starting with Celeron and PIII PCs, mobiles, then an Itanium server, through handheld devices, DSL and cable modems, 10/100 hubs, concentrators, VOIP and gigabit ethernet devices, cache appliances, XML accelerators, network processors, client/server LAN, v.90 Glite WAN and LAN, Net appliances like E-commerce accelerators, layer 4-7 switching products, more I didn't get.
Some of the purchased companies these are coming from, in no particular order of purchase or product release are Level I, Stanford Telecommunications (when'd Intel buy some of that?), Giga, Shiva, Ambient, Basis, Symbol, Netboost, DSP, Dialogic, more.
Those were just in the front of the stage. In back were about 6 - six foot tall racks full of all Intel products. Most of the space was taken up by servers: 1U, 2U, 5U and 7U high 19 inch rack mounts (1U=1.75 inches). The servers were 2-way, 4-way and 8 way, and serve application-wise as follows:
2-way as web servers
4-way as application servers
8-way as database servers.
Also in the racks were some of the products from above (and some not): e-commerce accelerators, e-commerce directors, gigabit switches and VPN gateways.
Of course, these are the kinds of racks that Intel populates their on-line service centers with. Somebody asked Andy later if Intel is selling the servers out on the open market. No, they're Dell or Compaq, etc. After the meeting I asked a guy with an Intel badge if I could go up on stage and look at the server racks more closely. No. Obviously a security guy (I think more for the people than for the hardware. Some nut brought a grenade into a shareholders meeting last week?).
Speaking of the on-line service centers, Intel has 2 or 3 open now, 10 planned by EOY. Sites are Santa Clara (open), Virginia, Korea, Japan, UK, others I didn't get. Craig said the centers are about the size of the convention center room we were in (huge), with thousands of servers in each. Some of the centers will be "lights-out" which means remote control and no humans inside unless something breaks. From the Q&A session, someone asked what would differentiate Intel from all the other companies getting into web hosting. Craig said Intel is a second generation, managed center, where Intel sets up all the HW, SW, networking, etc. and the customer doesn't ever have to go there, if they don't want to. The other type is "co-located" whereby customers may have the equipment in their own buildings, have to partially do the specifying, buying and managing.
Key Intel customers used to be Compaq, Dell, IBM, HP, etc. Now, still those plus companies like Yahoo, Google, Exodus.
Some other questions:
- How will Intel catch up with, or compete with AMD. Craig: already do compete very well: PIIIs outperform Athlons at same clock speeds. In 2H, new product lineup (Willamette, Timna, Itanium) will make Intel even stronger.
- What about those new threats to silicon we're hearing about, like chemical processors, Quantum, (not mentioned but I will): Craig, still a good 15 years left in Moore's law (circa 1967) with silicon (Gordon was there, intro'd). That would be approx. doubling of speed every 18 months. There may be new types of silicon switches to succeed current CMOS devices, to prolong the life of SI out to those 15 years.
- Demand and capacity? Craig said Intel is sold out in processors and flash. Doing something about flash with the big Rockwell Colorado fab Intel bought, doing something about CPUs by getting to 8 (I think) 0.18 micron fabs by EOY. Cap spending plans 6 billion for 2000, vs. 3.4 billion in 1999. My AMAT stock likes that! 200 to 300 mm wafer conversion to start next year with 0.13. Then, at 0.1, all 300 mm. My AMAT stock likes that too!
- Is Intel in direct competition with Sun, with all those servers, plus what's coming? Andy ? Yes.
- Is Intel in direct competition with Cisco, what with all those networking products? Craig and Andy: some, but major relationship with Cisco is still as a vendor.
Summary is that it was my most impressive ever Intel stockholders meeting for me, esp. because of the time spent on all the products, vs. strictly CPU chips, chipsets and mobos as in the old days. Found a note near the ones on capacity, etc.: DEMAND IS HUGE!
Tony |
