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Semiconductor industry

Computing Services Over the Internet: A New Market Emerging

Strategic Insights

— 1 min read

Major technology companies, including Hewlett-Packard and Intel, are taking steps to capitalize on the growing market of computing services over the internet. This new market is anticipated to be a significant player in the computing industry's future. Hewlett-Packard is establishing a new division to provide computing capacity "on tap" through its computing utility services division, aiming to offer software applications and computing power over the internet. Intel, the leading semiconductor company, has recently opened its first data center, boasting 12,000 servers capable of delivering web pages and information over the internet. The two companies are venturing into the same line of business, offering computing power wholesaling services, with numerous businesses already relying on managed web sites and e-commerce systems.

Key Takeaways:

  • Hewlett-Packard is forming a new division, computing utility services division, to provide computing capacity "on tap" through the internet.
  • Intel opened its first data center, capable of holding more than 12,000 servers.
  • Both companies aim to set new standards in the reliability of services accessed over the internet.
  • Multiple large companies, including Intel, Hewlett-Packard, AT&T, PSINet, and traditional web-hosting firms, are participating in this market.
  • Services will initially be sold to third-party service providers, who will package and sell applications and services to businesses.
  • Hewlett-Packard will offer pre-packaged applications over its service, such as Microsoft Exchange messaging system.
  • Intel will provide hardware, operating system, and basic software systems on which customers can run chosen applications.

Statistics:

  • The new market could be worth as much as $11 billion by 2002, according to Steve Murray, analyst with IDC.
  • Intel's data center has 12,000 servers.
  • Hewlett-Packard is establishing a new division focused on providing computing capacity "on tap"

Sources:

  • Financial Times Limited 1999.

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