Can Intel Gain A Foothold In The Hard Market Of Providing Chips And Cloud Computing Service?

When Intel announced the company’s decision which is to lay off 12,000 employees in an effort to restructure the company, there are some other noteworthy arrays.

Newspapers reported that the chip manufacturing leader cut 11% of its global human resources in the process of accelerating the revolution shifting the company from a computer chip manufacturer into a cloud computing and smart devices giant.

 According to a report done by Forrester Research, the cloud computing industry, a tool enables enterprises to build and operate a large number of software without installing servers or data centers, is a market of which value is expected to reach USD 191 billion by 2020.

And it is Intel who supplies chip sets for hundreds of thousands of servers that are running cloud computing services around the world, including big servers of Amazon, Google and Microsoft.

Even when the PC industry is facing with more and more difficulties, the company is also an extremely successful computer chip and smartphone manufacturer. Of course, Intel also has the right to restructure itself into a company specializing in cloud computing services.

In fact, Intel has accounted for overwhelming shares of all data centers in the world, not just data centers of cloud computing giants. According to IDC, Intel is currently controlling 99% of the market of the world’s chip server.

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In the future, will Intel chips be favored?

Intel forecasted that the future market will transfer from PC to smartphones and tablets. The company also foresaw a shift in how a business operation, which is to upload all data to cloud computing storages. However, at the same time, the company also realized that it did not have the strength of smartphone manufacturing.

Although the company definitely would try to produce chips and networking equipment, at least after laying off a series of employees, Intel understood that it could not build an image of a smartphone manufacturer.

Speaking of the array of IoT (smart devices connected to the Internet) Intel has never been too far behind its competitors. However, the future of this technology segment has not been shaped yet, so at least in the moment, it is hard to be sure about the future outcomes. According to Patrick Moorhead, the president as well as an analyst working for Moor Insights and Strategy, a company which has made careful researches on Intel, "There seems to be no force that is outstanding in the IoT sector." Intel was also quite honest to state that “Cloud computing and IoT will be the largest business segments of Intel in the future."

But even in the cloud computing sector, Intel also faces with many fierce competitions coming from the other big providers. Currently, technology giants, including famous names in the cloud computing array, are trying to develop a new AI technology, which is deep learning. This is the technology that supports the image recognition, or Google's voice search engine. However, deep learning depends on graphics processors that Intel does not supply.

Therefore, Intel has to offer an alternative - a type of chip known as FPGA. But now, GPU still remains the important part of the AI technology. And when AI becomes more popular, Intel's position will possibly decline compared to rivals manufacturing GPU such as NVIDIA. Although Intel’s efforts are remarkable, its future position in the cloud computing industry is something no one can foretell.

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