To: Doughboy who wrote (76735 ) 3/18/1999 4:52:00 PM From: Steve Fancy Read Replies (1) | Respond to of 186894
Merrill Analyst Says Intel Poised To Reap Rewards Of Server Market Dow Jones Online News, Thursday, March 18, 1999 at 15:56 NEW YORK -(Dow Jones)- Merrill Lynch & Co. analyst Joe Osha said semiconductor giant Intel Corp. is well positioned to take advantage of the growing market for servers, the ubiquitous but little-seen computers that tie together the world's networks. The analyst said Intel has been very aggressive in the market for low-priced PCs and has taken market share from companies like Advanced Micro Devices Inc. (AMD). But Osha said "Intel is in the process of becoming a server- and workstation-led company. That's where the growth is." Earlier this week, Intel (INTC) unveiled three high-end microprocessors aimed at high-performance workstations and servers. Its new Pentium III Xeon chips are an increasingly important part of Intel's strategy as prices tumble in its bread-and-butter business, the desktop PC market. Analysts say demand for servers is exploding because of the popularity of the Internet and corporate networks that link employees, customers and suppliers. Servers are poised to become even more pervasive as they start to take on many of the software tasks now usually handled by PCs. Servers already represent a big chunk of the global computer industry. International Data Corp. recently estimated world-wide server sales last year amounted to $59 billion, or almost a third of the size of the 1998 PC market. While that sales figure is down 1.7% from the previous year, that is only because average server prices are falling although demand has been skyrocketing. The server industry has long been fragmented into a hodgepodge of different software and microprocessor standards, mostly because they are used by a relatively small, sophisticated base of users that haven't demanded standardization. But titans Microsoft Corp. (MSFT) and Intel have promised to launch a fresh offensive in the server market that might bring about a commodization, or structural lowering, of server prices based on economies of scale. Microsoft plans to unveil its next version of Windows NT, now dubbed Windows 2000, later this year, while Intel expects to release next year a hefty new microprocessor aimed at the server market, code-named Merced. That so-called Wintel alliance has already taken a big bite out of both the workstation and low-end server markets, and the threat of PC-style economics in higher-end server markets has pushed International Business Machines Corp. and Hewlett-Packard Inc. into defensive strategies. Copyright (c) 1999 Dow Jones & Company, Inc. All Rights Reserved.