MCI to put Intel inside new WebMaker servers

Electronic News, June 17, 1996 by Cynthia Bournellis

San Francisco--Intel and MCI formed a new alliance, one which will not only keep Intel at the helm of creating next-generation silicon but will significantly boost MCI's revenues. "We expect to be a $30 billion company by the year 2000," said Bert Roberts, CEO of MCI. Of that, Mr. Roberts said $2 billion annually will come from MCI's Internet services.

The alliance is one of MCI's more important ones, said Mr. Roberts. "It came about, because Andy (Grove) finally convinced MCI to put Intel inside," joked Mr. Roberts, referring to the long-running "Intel Inside" ad campaign.

Mr. Roberts' statement is hardly a joke. "This alliance is comparable to Sun Microsystems' play with Java," said David Goodtree, a telecom analyst at Forrester Research in Cambridge, Mass. "As more people use Java, they'll need more Web servers."

Sun's tactic holds true for Intel, which craves applications that create a need for more processor power. That's why Intel's move to develop WebMaker software, the first product born from the alliance, is not unusual. WebMaker is a server based on a 200MHz Pentium Pro microprocessor. It is designed to help small and medium-size businesses create internal and external Web sites at the drop of a hat, as well as easily access the Internet. Intel will supply a complete system to MCI. MCI will market the product under the label networkMCI WebMaker and act as a systems integrator and Internet access provider to the customer.

Priced at $10,000, networkMCI WebMaker is an all-in-one package of pre-configured Internet hardware, software services and technical support. It consists of Microsoft Windows NT, an application suite that includes Netscape's communication server, an Internet Protocol switch E-mail server, Intel firewall security and management services and an integrated router from Cisco Systems.

A key component of WebMaker is Cisco's internetwork operating system (IOS), which resides on MCI's backbone and which is the technology upon which the Internet is largely built. The Cisco IOS connects network platforms such as asynchronous transfer mode (ATM) switches, routers, file servers, intelligent hubs and PCs. "Therefore, it only makes sense for MCI and Intel to embed the technology in the server," said Shaun MacDonald, business development manager at Cisco. "This alliance is significant to us, because it provides integration so smaller businesses can have the same kind of access to the Internet that our enterprise customers have been enjoying for years."

Other features of networkMCI WebMaker include real-time Internet access for TCP/IP LAN users and scalable leased MCI Internet connectivity from 56Kbps to full T1 speed. The average cost for MCI's overall service will be roughly $2300 a month. And, because networkMCI WebMaker is easy to use--it includes 10 prefabricated home page designs--businesses won't have to learn complex Internet technologies, such as hypertext mark-up language (HTML).

The alliance--which falls smack in the middle of two other partnerships announced last week: Pacific Bell and IBM will jointly market products that provide a single contact point from the desktop to the LAN; AT&T and Silicon Graphics will offer Web intranet and Internet systems integration to multinational companies through out Europe, the Middle East and Africa--is not exclusive to MCI. Mr. Grove said Intel will soon OEM WebMaker technology to third parties. He added that WebMaker will eventually support the Java programming language as well.

While most analysts called WebMaker a "nice little package," they said it will not have much bearing on the alliance. "The impact here will be in what MCI and Intel are going to do," said Forrester's Mr. Goodtree. Both companies are currently working to utilize emerging Internet standards in order to combat multimedia obstacles such as downloading content across a network.

The first three standards under construction are Internet Protocol Multicast, Resource Reservation Protocol and Real-Time Transport Protocol. These are being tested so that high-priority bits can be moved with the assurance of bandwidth and latency. If successful, the result will be the real-time delivery of time sensitive transports such as order entry or bank fund transfers over the Internet.

"We are creating software standards-based components and integrating them into communications stacks," said Frank Gill, executive VP of the Internet & Communications group at Intel. These components will appear first in future Microsoft operating systems and plug-ins to popular network browsers in order to enable new applications such as real-time audio and video, video E-mail, news on demand and 3-D graphics. Intel and MCI have already rolled out these new standards in three major U.S. cities. The trial will be expanded in the fourth quarter with a commercial offering next year.

These standards will also become vital to networkMCI WebMaker and are what MCI is counting on in order to crack vertical markets such as banking, education and health care, said Mr. Roberts. But some believe MCI has already laid a golden egg.