Intel/Internet: How much are thousand exabytes?

The numbers didn´t make furor on the stockmarket, but they were impressive:  The Q4 report of Intel. The bellweather of the chip market reported yesterday, that in Q4 of 2010 the revenue climbed 8% year over year, the profit jumped 48%. In the whole year 2010 the revenue passed the $40 billion mark, a new record for the technology champ.

This was really surprising in the face of all the speculation about the shrinking PC-market, because of the rise of the tablets, which need less computing power. The explanation: Intel CEO Paul Otellini referred to the growth of Intel`s data center group, where the revenue jumped 35% year over year. "The world of PCs plus new emerging computing devices is increasing the demand for servers of all types", reported Otellini.

Yes, servers are the "Heinzelmännchen" of our times, meaning the little house gnomes who have done all the work of the citizens, as an old German fairy tale claimed. This blog runs on the servers of blogger.com, which is a daughter of Google, and is distributed by the servers of Facebook. My E-Mails run on the servers of Yahoo, many people put their photos on Flickr and their videos on YouTube.  CloudComputing is the magic word, you don´t need much storage space or processing power on your own computer. You can use the servers of many providers in the Internet (the "cloud"), saving a lot of money.

This market, the backbone of the Internet, is exploding. "In 2010, total traffic crossing the Internet was roughly 245 exabytes", Otellini said. This was more traffic than all the previous years combined. Over the next five years, Intel expects that 1 billion more people will join the global online community with 15 billion connected devices, including PCs, smartphones, tablets, embedded devices, and smart TVs. The company estimates this will increase the data footprint across the Internet to over 1,000 exabytes. A exabyte is 1 billion gigabytes = 1 million terabytes, Wikipedia tells us, whatever that means.

This is also good news for investors. They can participate in this exploding market by investing not just in Intel, also in other promising players such as Google, Netflix (Movie downloads), Amazon.com and many others. But this needs some patience. In the short run the market often ignores facts & trends, as today with Intel, but in the long run the numbers will win, as the rising valuations of Google, Amazon.com or even Facebook show.