Intel aims to boost corporate demand with high-end server chip

SAN FRANCISCO Tue Feb 18, 2014 3:25pm EST

SAN FRANCISCO Feb 18 (Reuters) - Intel Corp unveiled a new high-end processor aimed at boosting lackluster demand from corporate customers like banks and retailers.

With Intel's core market of personal computers shrinking, the chipmaker's server business is becoming increasingly important. But its growth has recently fallen short of expectations.

Diane Bryant, general manager of Intel's Data Center Group, told reporters on Tuesday the new Xeon chip is aimed at customers like retailers, airlines, stock exchanges and credit card companies keen to instantly crunch growing troves of data.

The new Xeon chip is twice as efficient as its previous generation and allows more data to be held in memory instead of on hard drives so that it can be quickly analyzed.

"The Xeon E7 v2 will give a highly anticipated boost to enterprise IT, giving them the ability to deploy new capabilities that were previously impossible," Bryant said.

In the quarter ended in December, the Data Center Group's sales grew 7 percent, below the company's expectations due to slow spending by enterprise, a category that includes corporations and governments. However, demand from Web-based companies was robust.

Chief Financial Officer Stacy Smith said in January that weak demand from enterprise customers meant the Data Center Group's revenues this year would probably come in toward the bottom of his previous growth estimate of 10 percent to 15 percent.

While Intel's laptop and desktop chips typically sell for prices in the low hundreds of dollars, its top-of-the-line server processors may sell for thousands of dollars each, boosting the company's profit margins.

Bryant said the new Xeon server chips will make it easier for credit card companies to instantly analyze past transactions and send useful data to retailers looking to sell products to customers in their stores.

As another example of a growing field known as Big Data, Bryant said airlines have begun to use predictive analytics to head off unscheduled maintenance needs and reduce the number of flight cancellations.

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