Customers and staff at Intel Online Services (IOS) are facing an uncertain future following the decision by its parent company to pull the plug on its web hosting operations.
IOS was launched in 1999 at the height of the dotcom boom to take advantage of the growth in online services. It hosted ecommerce sites and provided other services for companies which did not want to run their own computer centres.
Intel confirmed that it will continue servicing existing customers for the next 12 months before gradually moving them to other service providers. It is not be seeking further customers for the services.
Experts said that one of the main reasons Intel got into this market initially had been to test its rack server and data centre management systems.
"The aim was always to test and prove the technology, seed it into the market and focus on that rather than the services," explained James Eibisch, a research director at IDC.
He indicated that Intel would be now looking to work with other hosting partners in order to embed its technology into their hosting operations.
One systems integrator, who declined to be named, insisted that the impact for his company was minimal as few of its customers had equipment based at Intel's data centre in Reading, which employs 250 staff.
"We have a lot of other partners in the space so it is not an issue; we have people climbing over the walls to do that," he said.
The integrator added that managed services had not been as successful as Intel expected them to be. "I can't think of anyone who would be massively affected by its closure," he said.
The division attracted few customers and problems got worse following the drop in the service industry market. IOS has gradually cut investment and made a number of workers redundant.
Eibisch added that customers would now be looking for very large, established companies to protect themselves against such a scenario happening again in the future.
He said that those who had got into bed with Intel did not view the relationship as being anything but short-term. "A lot of them had the same view that it was not going to last forever," said Eibisch.
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