Intel shutting down Web hosting division
Published: 19 Jun 2002 11:30 BST
Intel is closing its Web hosting division, the last of many business experiments the company tried in the late '90s.
The chipmaker will phase out operations of Intel Online Services (IOS) over the next 12 months. Existing customers will be shifted to other service providers, and no new customers will be sought. The division's staff consists of "several hundred" people, many of whom will be shifted to other divisions, according to an Intel representative.
Intel will take a charge of approximately $100m in winding down the operation.
Unfurled in 1999, IOS hosted e-commerce sites and performed other services for companies that did not want to maintain their own computing centres.
Although Intel had no history in the services business, it said it had experience setting up and managing factories on a global basis, a major task for Web hosting companies. To that end, Intel built hosting centres stacked with hundreds of servers in the United States, Europe and Asia.
The division, though, attracted few customers. Problems accelerated after an overall decline in the services industry began in 2000, which led other, more-successful services businesses, such as Exodus Communications, to file for bankruptcy protection.
Intel has steadily trimmed investments and the number of employees in the division.
Other experimental business groups were terminated in 2001, including a streaming media division, an e-commerce group and a consumer-electronics group.
"In the course of building IOS, we developed advanced technology that automates and standardises key Web hosting functions, as well as operational expertise that enabled us to deliver some of the best service levels in the industry," Dalibor Vrsalovic, president of IOS, said in a statement. "These capabilities will be absorbed into Intel's worldwide information technology operations to support our goal of becoming a 100 percent e-corporation."
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