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Intel Data Center Revenues Driving Growth

By Sean Michael Kerner (Send Email)
Posted October 14, 2015


Intel reported its third quarter fiscal 2015 earnings on October 13, with increasing growth coming from the data center market.

For the quarter, Intel reported total revenue of $14.5 billion, which is flat growth year-over-year. Net income was reported at $3.1 billion, for a decline of six percent year-over-year. Data CenterLooking forward, Intel provided fourth quarter fiscal 2015 guidance for the midpoint revenue range to come in at $14.8 billion.

Stacy Smith, EVP and CFO at Intel, said that the Data Center, Internet of Things and Memory businesses accounted for almost 40 percent of Intel's revenue in the third quarter.

Smith noted the Data Center Group had record revenue of $4.1 billion, driven by strength in the cloud and improvement in Intel's enterprise business. Smith added that Intel's Internet of Things (IoT) business segment reported revenue of $581 million, for 10 percent year-over-year growth.

Intel CEO Brian Krzanich was asked during the call about the competitive threat x86 faces from ARM. Krzanich isn't too worried.

"There has always been a competitor, whether you look in the PC market, or whether you look the Data Center market," Krzanich said.

Krzanich said Intel's goal is to always continuously push the product performance forward.

"The way we think about it is, what does it take to replace ourselves, especially in the Data Center." Krzanich said.

The consideration includes Intel helping enterprises determine a total cost of ownership, such that it would pay for a company to go to Intel's next generation, in terms of footprint, cost of operation and performance.

"There will always be competitors, and our goal is to just consistently outperform, and there will be new entrants and old entrants all along, trying to win share away from us," Krzanich said. "That's going to be a norm."

Impact of Windows 10 on Intel's Business

Krzanich was also asked about the impact of Windows 10 on Intel's business, particularly in the PC market.

"Despite ongoing macroeconomic headwinds, there are signs that the PC market is beginning to stabilize, and we continue to benefit from a strategy designed to capitalize on the growing need for the infrastructure that powers the smart and connected world," Krzanich said.

Krzanich added that he expects enterprises will migrate quicker to Windows 10 than some of the prior generations of Windows. At the same time, he said it takes enterprises a while to do conversions, so the process will stretch into 2016.

"I do see that this is a great opportunity, and we should see some tailwinds pushing us into the PC market," Krzanich said. "But it’s going to be over time; it’s not going to be, boy, next quarter it jumps."

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist

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