No one can dispute Intel's prowess in designing and marketing microprocessors. Its X86 line of CPUs has dominated the PC marketplace since the origins of the term "IBM-compatible", and despite the best efforts of a host of competitors it doesn't look likely to lose that position any time soon.
But when it comes to the networking business, Intel is something less than a household name. This is not a position Intel is used to, and not one it is prepared to live with.
According to David Bolt, general manager for Intel's Australian operations, the company will soon launch a significant expansion in its infrastructure product series, including hubs, switches and routers - an expansion Bolt believes will take Intel beyond the point of being a periphery player.
"We've got a very clear roadmap of where we're trying to get to with our networking," said Bolt. "We feel that we've got a very healthy part of the Fast Ethernet marketplace, and we're going to continue to drive that very hard."
Indeed, Intel's push into the Fast Ethernet NIC marketplace has made significant inroads into the revenue streams of a number of its competitors. Steep price reductions on Intel's NICs earlier this year look to have caught some of those competitors flat-footed. Add to this the purchase of sections of Case Technology's European manufacturing operations and a significant investment in portable solution developer Xircom, and you end up with a significantly expanded solution set.
But why be in the networking business at all? Intel's dominance in the CPU area guarantees it profits for the foreseeable future. Why then pump dollars into a unit that is not a core business area?
Bolt says a strong emphasis on networking is essential if Intel is to continue to drive the growth of desktop processing power.
Growing the network bandwidth available to PC users goes hand-in-hand with increasing processing power at the desktop. For some time Intel has been evangelising such technologies as Web telephony and videoconferencing - applications which are as dependent on heavy duty desktop processing power as they are on network bandwidth. For these applications to work, Intel needs to do more than sell processors.
Bolt says he is not underestimating the challenge of becoming a serious player in the networking arena, but sees a key advantage in Intel's intimate knowledge of desktop technology trends." To build a plant for microprocessors you better make sure you know what the market wants two years out, so, as we've learnt, you've got to be very precise and clear on where you're going. We think we can bring that skill to the networking side too.
"Everybody can come up with great technology, but we're probably in one of the best positions for being aware of what's going on." Bolt says this is intimately connected with PC management, where Intel has been driving such initiatives as the Desktop Management Interface, and also the NetPC thin client architecture it is developing with Microsoft.
Intel also realises the importance of resellers in helping it reach its goals, with business partners making up 100 per cent of end-user sales. According to reseller channel manager Jane Searle, Intel must now work to convince its resellers that it is a serious player. "I guess we'll have to prove ourselves - work with the resellers, do our own demand generation, and bring deals to them. And we've got a sales force that deals directly with end users to market our products, so it's a bit of push/pull."
Intel-ing the resellers
Bolt is hopeful the channel will respond. "What we're trying to say to the channel is you may not have thought of Intel anywhere but the CPU, but have another look. Number one, we've got credible products. But number two we've got a story that is unique. We're working out from the workgroup, we are a credible player at that level, and we know where the future is going. And the products are in line with future strategies for management and high-speed networking. No other player can tell that story."
Bolt is confident Intel isn't underestimating the difficulty of its task. "This is not a fly-by-night operation, we have been talking networking for a long time. I think the difference now is that we are visibly serious, we're investing real dollars in demand generation and the product line."