Chipmaker Intel Corp. says that a corporate IT spending wave is about to hit, and much of it will come from the cloud. Intel’s interest in the cloud stems from its recognition that cloud computing will require a whole new kind of chip — cheaper and more energy efficient. And the company believes it’s well-suited to take up the challenge.
I’m ecstatic that the industry is talking about spending — and therefore recovery — again. “We remain in an excellent position to benefit from the build out of
cloud infrastructure as well as the reconfiguration of existing data
centers for power performance efficiency improvements,” CEO Paul Otellini told analysts on January 14th, when the company posted a huge earnings jump during the fourth quarter ($2.3 billion during Q4 2009 versus $234 million in the same quarter last year). Included in those stellar numbers was a strong jump in sales for the company’s data center business group, which makes chips for
servers, workstations and data storage systems.
In a story that I read on The Wall Street Journal’s MarketWatch, several financial ndustry analysts predicted some pretty positive trends for both cloud computing and virtualization. For instance, an analyst with JMP Securities gave the thumbs up for Intel “towards the higher end of guidance” because he was confident that cloud
computing and virtualization trends “will drive increasing data center
upgrade cycle demand across the balance of the year.”
There’s no doubt in my mind that Intel is well positioned as an influential player in the cloud infrastructure, after all, most cloud providers get their chips from the giant. And the trends toward smaller budgets and more computing power are here to stay, and will grow. While Intel is only expecting modest pick up in spend for corporate PCs, the company is seeing potentially robust growth in the market for chips for server computers.
Hold on, though. Let’s not get too carried away. I like that one analyst quoted in the piece acknowledged that cloud computing is in its early stages — stating that the infrastructure is just being built in Asia and Europe.
Yet it was odd that no one in the piece mentioned the concerns that companies and end users have with cloud security and reliability issues.
Mental note: get a hold of those MarketWatch reporters to give them my take on this trend and the resulting demand for cloud-based services such as website monitoring and cloud provider monitoring.