Intel unveils networking strategy, products
12:12 a.m. Feb 25, 1998 Eastern
SAN FRANCISCO, Feb 24 (Reuters) - Intel Corp. on Tuesday unveiled a
range of networking products and strategies in an aggressive expansion
of its fast-growing computer networking business, including plans for
products to link up home PCs.
The semiconductor giant unveiled a major push to grow its estimated
$800 million networking group, with products aimed at specific market
segments, mirroring its microprocessor strategy to develop chips for
a wide range of markets, from low-cost PCs to big servers and
workstations.
While Intel said it is not seeking to become a company like Cisco
Systems Inc., the biggest maker of networking equipment for large
corporate enterprises, it said it plans networking products for home
users, small businesses and corporate users.
Intel estimates that each segment makes up a third of the networking
market.
''If you do the simple math, unless you are looking at all three of
these regions, you are ignoring a wide part of the base,'' Craig
Barrett, Intel's president and chief operating officer, said at a
press conference.
Barrett estimates there will be one billion networked personal
computers within the next decade, up from 150 million currently.
Intel has already been in the networking business for several years,
starting with networking chips and eventually moved to Ethernet
networking interface cards. In 1997, Intel said it launched 30
networking products and its business grew 40 percent in 1997 and is
poised for similar growth this year.
''We don't pull anything out by revenue base but I'd put networking
as one of the areas that will grow to multi-billion dollars,'' Barrett
said in an interview. He declined to provide any forecasts or
projections.
On Tuesday, as part of a big networking symposium Intel is hosting in
San Francisco, Intel launched networking hubs, switches and routers
aimed at branch offices and high-speed switches targeted to corporate
campus environments.
Intel also demonstrated gigabit Ethernet products for large corporate
users, but they are not yet available. Gigabit Ethernet switches and
routers transmit data at speed of one gigabit (one billion bits)
per-second and are 100 times faster than networks in businesses today.
Santa Clara, Calif.-based 3COM Corp., one of the leading developers of
networking products, said it already has early customers now deploying
its gigabit Ethernet system.
''It's going to be very difficult for Intel to have an impact on
that marketplace,'' said Jim Jones, marketing director of Ethernet
products at 3COM. ''They really do not have any presence in the medium
to large corporations worldwide (in networking).
They need to compete against Bay (Networks), Cisco (Systems Inc.) and
3COM, who dominate that market and unless they can bring something out
that is truly differential, I don't think they can have an impact.''
Intel also said it formed a Home Networking Operation within Intel. An
Intel executive said the company hopes to launch products for the home
before the end of the year.
''We are not ready to announce what we are doing, what technologies or
when we will have products,'' Mark Christensen, vice president of the
small business and networking group at Intel, said. Home users,
however, can expect products that are easy to install and easy to use,
in the same vein as the small business products Intel launched last
month.
While selling some of the computer industry's most arcane products --
switches and routers -- to home users may seem like a difficult task,
Intel said more homes now have multiple PCs and that families and
small business owners are seeing the need to connect their PCs, so
they can share printers, disk drives, and other peripherals.
Intel said there are about 14 million consumers with more than one PC
in their home, and the number is expected to grow to more than 30
million by the year 2000.
''It has to be easy to install, it's absolutely critical,''
Christensen said.
''To the extent that we are going to see multiple PCs in homes, they
are something you inherently want to have connected,'' Mark Edelstone,
a Morgan Stanley analyst said.
International Business Machines Corp. and Compaq Computer Corp., both
big customers of Intel, have also talked about networking PCs in the
home. In a speech at Comdex last year, Compaq CEO Eckhard Pfeiffer
envisioned a future with a myriad number of PCs in every room, run by
a server in the basement.
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