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What the Hell is… Intel Online?

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Mike Aymar, president of Intel Online Services, gave Internet World 2000's first keynote and a beauty it was. While we were all wondering exactly what the "Internet application hosting subsidiary of Intel" was going to do, he seemed more occupied with regurgitating the same old Internet future guff.

Did you know the Internet is growing faster than anyone thought? That business-to-business is where most of the money is? That you're gonna have to be an Internet company in the future to survive? Yes, you did, but that didn't stop Mike talking about it for 25 minutes. (If all revenue projections are flawed, why are half your slides made up of them, Mike?)

But then we started talking about services. Hurrah. The way Intel sees it, Internet services will be split up in the same way as PC infrastructure: like a pyramid with a foundation (network services ie. cables, etc.) built upon by operation services - where Intel Online will become "the leader in the world" - then by application services and on top of that solution services (e-business "solutions" - ugh).

Mike sees a "value gap" between operation and application services, and so Intel Online will fill it by offering fully managed application hosting.

Wasat? Intel will have big fat datacentres where they will store absolutely everything IT-based in your company and you will access it through the Net (virtual private networks). And then he left.

None the wiser, we went to the Intel Online stall and asked there. They had a demo, but when asked to do more than click "next", the marketing lady grew worried. When she learnt we came from The Register, the walls came down and we were led to a press representative. Still only the sketchiest details appeared.

Third time lucky, a lunch meeting with the man himself. Intel has built four huge datacentres - east coast, west coast, Korea and now one in Reading, England. These will store all your company's IT information totally securely, with huge efficiency, guaranteed availability, etc, etc. The centres are earthquake-proof, max security, backed-up and all you have to do in return is pay them a wodge of cash every month ($2000 a server, minimum of one server per person). These things are costly to build but that's the way the market is going, claims Intel. The pricing structure beyond simple server storage was left in the shadows.

While the propaganda points to a nice pyramid structure where Intel's heavy-duty plans look like a simple building block, it disregards a huge and powerful section of the IT market. Intel is only too aware of it. "It is important, no fundamental, to be independent to network service and application service companies," he told us. What this means is that Intel will disregard or steamroll all companies that aren't pipe owners, software writers or consultants.

It has already made alliances with a range of consultants which will takeIntel as their "preferred hosting company" (Agency.com,PricewaterhouseCoopers, Proxicom), and it's not hard to see this is a good deal for all concerned.

As for software writers, it couldn't give two hoots - they will sell to anyone at any time (plus, Microsoft is an old friend). Interestingly though, no buddy-buddy connections with the network boys. "We will have to work with all network services - MCI, UUNet, Cable & Wireless." An IT company claiming it is going to work with the entire market is a good sign that its initial terms were turned down. When asked about impending overlaps (C&W, for example, just last week announced its intention to become an ASP), Mike slipped into Double Dutch.

He was also a little cagey about what kit the datacentre would contain. It will install anything that customers want, of course. But with the centres expected to make between 95 and 99 per cent of their revenue from this "second generation" total-control hosting, it will inevitably move toward a preferred set. Hardware is Pentium III Dells and Sun UltraSparc servers and it'll handle Windows NT, 2000, Linux and Solaris. Aymar expects a move toward Windows 2000.

The question remaining though is: will people want a totally outsourced IT system? The whole IT game continually shifts between individual PCs and in-house tech support to dumb terminals and totally outsourced IT infrastructure. Intel is reliving history from way back in the 60s where hermetically sealed IT buildings were all the rage, and picking up the late 70s when agencies were offering to do it for companies so they didn't have to pay troublesome IT staff.

Every time it's the battle between IT specialists (who know they can do it faster and cheaper and without having to talk to annoying company managers) and company managers (who don't trust these tech-heads and would rather keep it in their grasp so they can shout at salaried individuals).

Is the time right for Intel's plan? The Internet has certainly removed some of the remote access paranoia, but do people trust it to run the whole show? Intel seems to think so.

Incidentally, Intel will be sticking to standard SLAs (even though it effectively controls your company's transactions), so if it all goes horribly wrong and your company is unable to process any data at all for a week, you will be compensated for lost downtime but not lost revenue. Seems fair enough, doesn't it?

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