THE DAY AHEAD: Scenes from Intel's e-business lovefest
COMMENTARY -- If you listened to Intel execs pitch at its eXCHANGE e-business summit this week, you'd think officials were abducted by solution-happy e-business aliens, who were hell-bent on ushering the "new, new computer industry."
Here are a few snippets from the event.
Intel's reach
One thing that became increasingly clear during Intel's e-business solution fest is the chip maker's reach via investments.
About half of the exhibitors in Intel's e-business showcase have received funding from the chip giant. Some of these companies have had some eye-popping IPOs, which goes a long way toward explaining Intel's big investment gains.
So why is Intel (Nasdaq: INTC) so big on e-business? It's about selling Intel's high-end chips, most of which aren't shipping. During each keynote, references were made to Intel's Itanium chip line, which promises to change the world -- when it actually ships. Intel touted the coming of the "new, new computer industry" that will reach $8 trillion by 2020.
In Intel's world, computing power is at the center of the e-business revolution. In this new world, Intel CEO Craig Barrett says "solutions" at least once a minute and the chip giant's fingerprints are everywhere.
Back to those Intel commercials
For Selectica (Nasdaq: SLTC), an Intel investment enabled the company to optimize its Internet selling software to run better on all platforms. Intel's cash was nice too.
For Ariba (Nasdaq: ARBA), Intel's Itanium chips will mean the company can expand its B2B software to more customers. Ariba, which can run its software on any platform, began by focusing on Fortune 100 companies, which meant optimizing for Unix.
Ariba wasn't alone in its praise of Intel's Itanium, due in the first half of 2001. The company's booth was perched next door to competitors Oracle (Nasdaq: ORCL) and Commerce One (Nasdaq: CMRC), as well as partner I2 Technologies (Nasdaq: ITWO).
Most of these B2B players went after the big customers first. That's changing as customers down the food chain plan Windows 2000 and Itanium transitions. "Itanium will really help our adoption rates," said one Ariba booth jockey.
Even Hewlett-Packard (NYSE: HWP) CEO Carly Fiorina couldn't refrain from the Intel commercials. She said Itanium is the biggest technical shift facing information technology. Fiorina put Itanium ahead of open source technology such as Linux and the move toward service-based computing. Itanium may be the real deal, but I wouldn't rank it that high.
That pesky stock price
Intel could talk solutions, e-business and the new era in computing, but it couldn't escape its falling stock price. Shares have been hammered since Intel's third quarter profit warning. Meanwhile, rival AMD (NYSE: AMD) delivered great results.
During Barrett's keynote, CyberCorp CEO Philip Berber illustrated how his company's software was running its trading software on Intel's latest chips.
Barrett said he was "almost afraid to ask" about the stock price and to no one's surprise it was down. Berber noted that he thought Intel was a screaming buy and asked Barrett for advice. "I think the SEC would put me in jail if I said anything," quipped Barrett, referring to Intel's quiet period ahead of its earnings. Barrett later said Wall Street was overreacting about Intel's profit warning.
Nevertheless, Berber bought shares with "live money in my account." Of course, the Itanium pitch wasn't forgotten. The spikes in volatility and trading volume would naturally need Intel next-generation processors to keep up.
Shhhh.
Optimism abounded at Intel's e-business shindig, but there weren't many details to back up the bullish outlook.
Blame the quiet period.
With most companies reporting earnings in the next two weeks, most officials were relegated to terms such as "business is looking good" and "we're comfortable with expectations."
Selectica CEO Rajen Jaswa knew the drill. He couldn't say much about his company's financial results, which will be reported Oct. 17, but hit some key points.
"Once Y2K ended, all the IT spending went to e-business," he said. "Ninety-nine percent of our customers are brick-and-mortar and they're all investing in this for basic business functions. E-business applies to everybody. We're comfortable with our business."
Symbolism?
Intel also provided a little entertainment with Huey Lewis and the News performing at a local club Wednesday night. Compaq sponsored the event.
Nothing against Huey, but I had to wonder about the symbolism behind the choice, especially given the "new, new computer industry" chatter. Huey Lewis saw his heyday in the late ྌs and early ྖs. And some would say that was the high mark for the PC industry. TDAIN
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