Intel Points Its Partners Toward SMBs

Intel projects solid growth ahead for both servers and desktop systems in the SMB segment, offering resellers a major opportunity to replace an aging installed base and satisfy emerging demand for new applications. That was the semiconductor giant's message at its presentation Tuesday at VARBusiness' XChange conference in Chicago.

In the server arena, Intel predicts strong demand for both its Xeon commodity servers and its Itanium 2 high-end platforms. At the same time, it sees the server arena splitting into three distinct segments as traditional pedestal systems are upstaged by the increasingly popular blade and rack-mounted platforms.

"When platforms begin to segment like this, it's a great opportunity for the channel to differentiate themselves and extend their growth," Eric Thompson, channel marketing manager for Intel Americas, told the audience.

Specifically, Thompson said demand will be focused "primarily in the rack-optimized space, with blades beginning to ramp up in late 2004 and early 2005, while pedestal servers remain relatively flat."

Demand will be driven by customer requirements for beefed up storage, security functions, Web services and e-mail servers, Thompson said.On the desktop front, Intel foresees the strongest demand at the low end of the SMB space, at companies with under 100 employees.

"The opportunity in small business is big," said Shirley Turner, director of North American channel marketing for Intel. "Twenty-six percent of all platforms today are sold into small business."

Turner predicts a 5 percent cumulative annual growth rate over the next few years for sales of PCs into such businesses. That ramp-up will be driven by customers' replacement of aging systems.

"There are 40 million PCs in the small business environment today that are more than three years old," Turner said. "In North America, that translates into a 12 million to 15 million system [replacement] opportunity."

Intel is pitching its new 915G chipset as the platform that will give VARs a good sales story to sell into that replacement market. The chipset, when combined with the Pentium 4 processor, creates a potent PC desktop with a host of new features. These include the PCI Express fast I/O technology, high-definition audio, and integrated security features.Intel expects to roll out an 915G marketing campaign aimed at the SMB market during the next four to six weeks.

On the server side, Intel is emphasizing its new 64-bit-capable Xeon processor (formerly code-named Nancona). Systems built with the CPU will include an 800-MHz front-side bus, eight USB 2.0 ports, PCI Express and support for DDR2 memory.

Intel rounded out its XChange '04 presentation with talk about its new Digital Home consumer initiative. Digital Home is Intel's broad push to place networked entertainment devices in every room, so consumers can listen to mp3 audio files, watch movies and download digital content.

Intel is already working to build demand, hoping to jump-start consumer sales during the 2004 holiday shopping season of media-capable "entertainment" PCs.