Intel inside - your network, that is

By John Gallant, Network World |  Development

While it is fashionable in the venture capital community to talk about
the "saturation" of the enterprise network market, or the slowing of innovation there,
there's one big industry player that doesn't buy into the notion: Intel.

Under CEO Craig Barrett, Intel is quickly transforming itself from a microprocessor
company into a beefy contender battling Cisco and 3Com in the market for midsize and
small corporate nets.

Although revenue from traditional microprocessors dominates Intel's balance sheet,
there is a rapidly growing contribution from network products -- from communications
chips and server components, to adapter cards, routers, switches and remote access
gear. As we report this week, the firm is bolstering its high-end offerings with a
Gigabit data center switch and rolling out new routers for small offices.

Intel has an array of management tools and voice/data integration offerings. It is
even branching out into services such as Web hosting.

Virtual private networks (VPN) are key for Intel. Also in this week's issue, we
report that the firm will build on the technology it acquired with remote access
pioneer Shiva to create integrated voice/data access devices that help companies carve
out VPNs over the Internet or other networks.

Intel's design is to use its powerful brand name to dominate the network market. The
company is also using its vast financial resources to make acquisitions that strengthen
the attack, including the buyouts of Shiva and computer-telephony expert Dialogic, and
deals for communications processor companies Level One Communications and Softcom
Microsystems.

As one Intel executive stated in a recent meeting, "We want to be the building block
supplier to the Internet economy." Put otherwise, Intel will sell all kinds of picks
and shovels to the companies getting in on the Internet gold rush.

Intel is not likely to challenge Cisco any time soon for the Internet core or
Fortune 100 nets. But Intel is the strongest challenge to Cisco for the rest of the
network world. 3Com wrestles with organizational and focus issues that Cisco, with its
own powerhouse brand, will exploit.

One wild card here is Hewlett-Packard. Networking has always seemed an also-ran
within HP, although the firm has gotten more aggressive on price in the switching
market. If new CEO Carly Fiorina sets her mind to networking, we could see a delightful
donnybrook among HP, Cisco and Intel in the new millennium.

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