Intel Shifts Towards Data Centers, Away from PC Chips

    November 30, 2015

    By John Miecielica

    The name that used to be synonymous with PC chips faces a dire choice — move on with the market, or perish. But Intel is actually taking great strides to match the market’s shifting demand, and its new investments in cloud technology promise a big payoff in the long run.

    Businesses are still buying Intel's signature computer chips, but they’re no longer selling quickly enough to be the foundation of the company’s business. What can Intel do to adapt? How does a company that revolutionized communications react to a brand new technological revolution?

    Intel’s Switch to the Cloud

    Intel has been very adept at pivoting in a new direction, as the New York Times emphasizes. Had the company remained solely in the chip business, it would have been put at a competitive disadvantage. With the rise of cloud computing, the market is shifting — now, a smaller and smaller number of purchasers compose a larger and larger share of chip purchases. Without changing its model, and with its computer chip business continuing to shrink, Intel could find itself backed into a corner, lacking the assets it would need to succeed in a new era.

    But Intel has instead taken the necessary steps to diversify its holdings, expanding into the new territory that has emerged with new technologies. As the market for PC chips continues to shrink, the company is finding success in supplying highly advanced microprocessors and other physical infrastructure to cloud companies, according to another New York Times article. However, Intel is also diversifying its product line and investments to take into account the software that is needed for businesses that work in the cloud.

    The company has announced major investments in the cloud engineering firm Mirantis, choosing to place its bets on a successful startup and take advantage of new energy in the market. Intel has also recently invested in the frontiers of data analysis with its purchase of Saffron AI, as Fortune reports, and announced a partnership with Oracle to encourage companies to move their systems to the cloud provider’s network, according to the Register.

    These are just a few examples of how Intel is moving rapidly to embrace the changes in the IT market. Instead of being rattled by change, they are moving full speed into the future of enterprise computing.

    Risks and Rewards

    With its forays into the industry of the cloud, Intel takes on new sources of revenue — but not without also taking on new risks. The cloud presents Intel with new infrastructure challenges that must be met in order to ensure security and quality service. Consumers have been rattled by hacks that have made everything from their private photos to their credit card information vulnerable.

    Those concerns are exactly why Intel is also investing in cloud security, as eWeek reports, so as to ensure that new technologies do not leave consumers or business clients vulnerable.

    Intel is also sharing a new challenge that is familiar to both cloud providers and customers. In an increasingly diversified service environment, ensuring smooth transitions between in-house servers and cloud storage is a must. To that end, software from TeamQuest can be extremely useful and prevents problems such as lag time or failures of service.

    What It Means for the Rest of Us

    Intel's transition reflects changes in the way that we work and communicate, a shift that’s affecting every business from tech giants like Intel to smaller, independent firms. The companies that manage to actually increase their service levels in response to these changes will have a serious competitive advantage — just ask Intel. Its stock prices are up above previous projections, and will likely continue to rise.

    As your IT infrastructure becomes more complex, it’s important that you’re able to sharpen your capacity and performance management abilities. With the help of TeamQuest, you can keep tabs on the activity and capacity of your systems in physical, virtual, and cloud-based environments. Prevent downtime and slow response with a suite of software tools that will leave you well-equipped for the age of the cloud.

    (Main image credit: Uwe Herman Intel Celeron CPU/flickr)

    Tags: teamquest, intel
    Category: best-practices