Intel, the world's largest manufacturer of semi-conductors is entering the computer services business for the first time and will offer corporate customers an electronic hosting service using computer centres built and operated by itself.
The US group is expected to announce details of its plans to "rent out" highly reliable, 24-hours-a-day computer capacity in centrally controlled "server farms" next week.
The service will initially target small and growing companies that do not have the internal resources to operate their own data centres to support growing e-business operations.
Dr Andy Grove, Intel chairman, described the new service, which will be rolled out initially in the US and then in Europe, as providing computing power "a [computer] bit at a time".
He said the new service would help companies cope with the unpredictable demands placed on computer systems, especially the servers that handle e-commerce.
IT companies are predicting a surge in the demand for servers over the next few years as companies adopt Internet technologies and embrace e-commerce. For example, Intel estimates that today only 4 per cent of the servers required by 2005 have been deployed.
Meanwhile, the information stored on the machines is changing from what Dr Grove described as "the relatively mundane and no-mission critical" to "the actual life and blood of commercial order processing, inventory control and the like". As a result, companies increasingly require systems that will run 24 hours a day, seven days a week and have fail-safe features, high level security and sophisticated data management.
"We intend to do that in the centres by equipping them with state-of-the-art controls and encryption, and all of those things that are used by large companies today," said Dr Grove.
Speaking to executives at a Confederation of British Industry meeting in London this week, Dr Grove was a critic of the slow uptake of technology in Europe. But he said he now believed Europe had woken up to the Internet.
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