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Intel targets Wall Street back offices

A deal with Reuters may serve as a Trojan horse in a drive to dethrone Sun Microsystems in the financial services industry.

Intel is stepping up its efforts to put its architecture into back office operations on Wall Street.

Intel said Wednesday that it will broaden an alliance with Reuters to optimize the market data provider's products and platforms using the chipmaker's processors.

The deal is notable because it may serve as a Trojan horse in an effort to dethrone Sun Microsystems in the financial services industry. Sun, with its RISC (reduced instruction set computer) chips and own brand of Unix, has long dominated the financial services sector, which spends roughly $26 billion on information technology a year.

But with cost-cutting rampant on Wall Street, brokerages and others are looking to pare back on pricey computing products. For instance, Reuters recently said that it will port its data services from the Unix operating system to the lower-cost Linux alternative by the first quarter of 2003.

Alexander Hungate, chief marketing officer at Reuters, said the company's clients are "using Linux to consolidate efforts and costs."

The move would put Linux behind many of the computers that power trading floors, and Intel wants its chips tagging along. The combination of Linux and Intel has been gaining steam. For instance, Red Hat, in partnership with Hewlett-Packard, has begun selling a version of its Advanced Series Linux for Intel's Itanium chip.

Intel President Paul Otellini, speaking at a press briefing at the Securities Industry Association Conference here Wednesday, said that the financial services sector is one of the company's target markets and that Intel-based computers are increasingly working their way into Wall Street's back offices.

"We're making inroads at the brokerage houses," Otellini said. "It's a high-profile industry, which is why we target it."

The Reuters deal will help put Intel on the radar of Wall Street's chief information officers. The two companies will advertise together and speak at industry conferences such as the SIA gathering, where Otellini is delivering the keynote address.

Sun isn't going to sit still, however. On Tuesday, the computer maker announced its four-processor "Cherrystone" server, a key product to fend off Intel.

Otellini said he couldn't comment on Cherrystone since he hadn't seen the price/performance specifications, but he expressed confidence that Intel's products were less expensive.

"We're getting major wins at every account," Otellini said. "It's been a six-year effort."