Experton Group Weekly IT News

Intel Still Dominates Processor Market; Dell Considers Services without EDS

By: Jerald Murphy

Intel Corp. recently announced that it was the top selling processor vendor. In other news, IBM Corp. engineers are looking at tapping massive data streams, while Dell, Inc. looks to expanding its own services in the wake of Hewlett-Packard Corp.'s (HP) acquisition of Electronic Data Systems Corp. (EDS).

Focal Points:

• For the first quarter of 2008, Intel continued to dominate the list for worldwide market share of microprocessors, with an almost 80 percent share. However, Advanced Micro Devices, Inc. (AMD) improved its own market share by 2.2 percent from the previous quarter to 13 percent, although this number is one percent lower from the previous year. The report showed that the average chip selling price has been stable for the last quarter, which indicates some back off in competition between AMD and Intel. AMD recently released its "Puma" platform for laptops and its quad core "Phenom" chips for desktops, while Intel plans on releasing its Centrino 2 platform on July 14th.
• A recently published research report estimated that 161 billion gigabytes of digital data were generated in 2007. In addition, the report predicted information generated will increase the ability of storage systems by 2010. Much of this information is critical to future business operations, including richer, dense information such as medical images and television programs. Researchers from IBM plan on using knowledge from point solutions and modify them to handle data streams in real time. IBM officials said they are working on a holistic insurance solution for handling data that includes hardware, operating systems, middleware, compilers and development tools. While there is no immediate production plans, IBM currently has 300 patents in this area, with a couple pilot projects with large financial institutions.
• Officials from Dell said that they will continue to work with EDS for outsourced services, after EDS's recent acquisition by HP. However, Dell executives also plan on expanding their own services in the future. EDS and Dell have worked closely together on many large deals, such as the $1.4 billion contract for workstations and PC for the Navy and Marine Corps. With EDS now being part of HP, Experton Group expects any future deals such as this would replace Dell hardware with HP hardware. Officials from Dell have indicated they are moving from standard services that they did with EDS to a software as a service (SaaS) model. Dell officials are also considering cloud-based, on-demand services

Experton Group believes Intel will continue to lead the processor market share for the foreseeable future, but AMD's continued move for innovations will keep the market competitive, which will ultimately benefit the enterprise.

New storage and analytical models will need to be developed to handle richer data streams, but Experton Group thinks innovation will keep ahead of storage requirements. Dell is likely to enhance its own services, but will need to continue cooperation with EDS for several years to service existing contracts. IT executives should review any merger and acquisition clauses in existing contracts with EDS to determine whether any concessions are warranted.