Intel took its biggest step yet towards moving firmly into the data-driven future when the company reported that nearly half of its first-quarter revenue came from its data-centric businesses.
"As Intel marks its 50th anniversary, we're well positioned to be the end-to-end platform provider for the new data world and a leader in the artificial intelligence and the autonomous revolution," Intel CEO Brian Krzanich said during the company's Q1 earnings call, adding that it was Intel's best quarter yet.
The data centric portions of Intel's business, which includes processors for data center, artificial intelligence, Internet of Things, and cloud, accounted for 49 percent of sales in the quarter ended March 31.
Krzanich said the acceleration of Intel's data-centric transformation led the company to upgrade its full-year 2018 revenue outlook by $2.5 billion to $67.5 billion, which would be a roughly 7.5 increase from 2017.
"I don't know if we would have looked back in time and said we would have seen this happening," Kent Tibbils, vice president of marketing of Fremont, Calif.-based ASI Corp., one of Intel's largest distributors, told CRN. "It's actually surreal to be here."
At the same time, Tibbils said, he isn't surprised that Intel was able to reach this point given the strong growth in the data center business "They have been preparing for it and preparing customers for it in their entire channel," he said.
But what did surprise Tibbils was Intel's three percent growth in its PC-centric business, which, at $8.2 billion in revenue this quarter remains just slightly ahead of the data centric businesses which accounted for $7.53 billion in sales for the quarter.
The overall PC market has been in continuous decline for the last few years, but Tibbils said a demand for high-performance PCs, whether for gaming or content creation, with higher average selling prices, has been driving sales.
"It's not just on higher ASP with processors but also on motherboards," with people buying more memory and other components, Tibbils said.
On the earnings call, Krzanich said Intel is still expecting to release new client PC and data center products with hardware-level protection against the Meltdown and Spectre exploits later this year. He also noted another thing previously said by Intel: that the company has released microcode updates for products released in the last nine years to address side-channel vulnerabilities.
"I am pleased with our progress and proud of how Intel and industry partners addressed this issue collaboratively, with transparency and with customer-first urgency," he said.
Michael Goldstein, president and CEO of LAN Infotech, a Fort Lauderdale, Fla.-based solution provider, said he's impressed Intel has been able to weather the challenges brought by Meltdown and Spectre this well.
"It is great considering the challenges they've had this year," he said.
Goldstein said he's been satisfied with Intel's latest data center products, which are providing "the bang for our buck." He added that the product lineup has been simplified from previous years, which makes it easier to go out and sell to customers.
"We've really seen a lot more power coming out of those new chipsets, and we see a lot of those driving our business," Goldstein said.
Intel's Data Center Group in the first quarter remained the company's fastest-growing business, which increased 24 percent year-over-year to $5.2 billion. Trailing behind was the Non-Volatile Memory Solutions Group, which grew 20 percent year-over-year to $1 billion. The Internet of Things Group and Programmable Solutions Group both increased 17 percent to $840 million and $498 million, respectively.
Overall, Intel posted first-quarter earnings of 87 cents a share on sales of $16.1 billion, up nearly 9 percent from the same quarter a year ago. The results were well above the Wall Street consensus of earnings of 72 cents a share on sales of $15.05 billion, according to analysts surveyed by Thomson Reuters.
The Santa Clara, Calif.-based company's company's shares were up six percent or $2.93 to $55.98 in after hours trading.