Intel: Server Sales Strong Now, And Getting Stronger

One of Intel's top channel executives says notebook sales through the custom builder channel are showing triple-digit growth this year, while the migration to 64-bit computing could spark brisk server sales for the channel in 2004.

Steve Dallman, director of North American channels for Intel, Santa Clara, Calif., also told systems builders attending an Intel channel conference that the company would provide a boost to its channel logistics by opening a new fulfillment center in Los Angeles to ship components to them.

"I think that means we can take a week to ten days" of inventory out of the channel pipeline by adding the logistics site, Dallman said. Currently that effort is operated out of Malaysia.

"That means they can carry a week to ten days less inventory," Dallman said in an interview after speaking with systems builders. "That means their credit lines can all go up 25 percent. By improving logistics by a week, you can essentially raise your channel's credit limit by 25 percent, incurring no risk or no additional cost to anyone. That's a big deal."

The new facility in Los Angeles should be operational by June or July, Dallman said. It will focus on providing motherboards and CPUs on a timelier basis to distributors, who will then ship them to white-box builders.Dallman made his announcement at the start of the Intel Solution Summit in Las Vegas, a three-day conference of more than 200 Intel Premier Providers.

In 2003, solution providers in Intel's Premier Provider program grew its desktop and server sales at double digital rates, and its sales of custom-built, unbranded notebooks at high double digit rates, Dallman said. In his conference speech, he told systems builders he expected significant growth in almost all of Intel's strategic areas, including servers and the digital home market.

"We want to see you guys building servers, including media servers for the home," Dallman said, addressing what he described as a more than $100 billion market opportunity in the growing digital home market.

"We're going to use 64-bit [computing] to drive the refresh cycle," Dallman said. He noted the company recently committed to begin shipping 32-bit Xeon processors with 64-bit extensions, a move that would ease the transition of software from one processing platform to the next.

"There are a lot of customers who now feel obsolete," Dallman told the audience. "That means we can go back in there and start upgrading these designs and selling them the right server at the right time at the right place."0