Besieged on all sides, Intel strength remains the datacenter

It's one of the few bright lights in their earnings report.
Written by David Chernicoff, Contributor

Not a day goes by when some tech pundit, web site, or print publication doesn’t lead with a story on how they believe that the PC is dead. They point to all sorts of reasons why we are entering the post-PC age, and pull statistics, opinions, and prognostications out of the air at will. Regardless of how you feel about this there is one thing that is not strictly opinion and that is following the money. And in Intel’s case, the revenue from the sale of PC-focused components continues what appears to be a long, slow decline.

The assault on the pC is coming from many directions. Users who would once have purchased an inexpensive computer for email and web browsing are often now doing those tasks on their smartphones and tablet computers, two areas where Intel is barely an also-ran. And they are directly impacted by the slowdown in PC sales.  Annual revenue for the PC Client Group is down 3 percent year-to-year, with the last quarter of 2012 being down 6%.  Revenue targets are being met, but this is only indicative that the slowdown in sales has been expected.

The bright spot for Intel once again is in their datacenter sales, where they were up 6% year-to-year, a growth rate that continues to climb as sales in the datacenter market continue to grow. There is little doubt that Intel will continue to grow revenue with their datacenter group, as the efforts by non-X86 CPUs in this space are still very specialized and limited in scope.

Intel can’t drive their entire business through their datacenter market growth; they will still need to become a much more significant player in mobile devices and in whatever technologies the future will bring. But strong datacenter sales reflect the overall growth of the datacenter market, and further adoption of cloud and collaborative technologies will see the strength of this market space continue to climb.

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