Here's how Intel plans to thread the cloud vs. enterprise data center needle

Intel's future growth prospects rests with its data center unit. The chip maker said growth in cloud will offset an slowdown in enterprise data center spending.

For Intel, being an arms dealer for both the cloud and enterprise data center has its privileges.

At its annual investor meeting, Intel outlined its outlook and walked through how it's going to grow in the years ahead. For Intel to hit its targets, it'll need its data center unit to deliver enough growth to offset sketchy prospects for PCS.

Luckily for Intel, its processors are used in enterprise data centers as well as public cloud providers and other key as-a-service players. Either way, Intel wins. Toss in how networking is being virtualized via commodity servers and Intel may gain there too.

See also: Intel expects revenue growth to return in 2016

"The cloud is taking away from enterprise growth, but we're agnostic to that. The cloud is still growing faster than the slowing growth or decline of the enterprise," said Intel CEO Brian Krzanich.

Diane Bryant, general manager for Intel's data center group, walked analysts through the chip giant's master plan, which revolves around remaining an enterprise staple and growing via cloud computer.

Bryant said Intel's data center unit can grow at a 15 percent compound annual growth rate. Here's a look at the main takeaways.

  • The enterprise IT market will grow overall, but servers may not drive results. "22 percent of our revenue will come from non-CPU components," said Bryant. Here's where Intel sees its growth landing.
  • The cloud market is diversifying amid clouds for high-performance computing, HPC and private clouds. Intel plans to sell chips into all of those markets.
  • Intel sees the cloud market as the super 7 accounts--Microsoft Azure, Amazon Web Services etc--and up-and-coming cloud providers. "The next wave of public cloud providers is growing at a faster rate than the big names," said Bryant. These fast-growing providers include the likes of Uber and
  • Cloud providers are paying up for custom CPUs and Intel projects that its average selling prices will increase. Bryant said cloud providers are gunning for big performance gains and will pay for it.
  • Enterprises are going cloud, but there's a lot of nuance there. "Every CIO is going through their applications and looking at what is better off pushing to a public cloud service provider," said Bryant. What doesn't go public cloud may go private cloud.
  • Networking will be a big growth driver. AT&T, Verizon, SK Telecom and Vodafone are moving to Intel architecture for its virtualized networks.