Intel to Exit Prebuilt Server Business, Sells Data Center Solutions Group to MiTAC

While Intel is best known in the server space for their processors, networking gear, and other components, the company also has a small but respected prebuilt server system business, the Data Center Solutions Group. However, as confirmed by Intel today, the days of Intel-built servers are coming to an end. As part of the company's broader strategy to move away from low-margin businesses, Intel now plans to stop selling servers and will sell the remains of the business to one of its partners, MiTAC.

In a story first broken by ServeTheHome, the server-focused website reached out to Intel for a comment regarding rumors of the sale. Intel, in turn, responded with an official comment, confirming that the rumors are true.

"In line with Intel's continued efforts to prioritize investments in its IDM 2.0 strategy, we have made the difficult decision to exit our Data Center Solutions Group (DSG). As part of this plan, MiTAC, an edge-to-cloud IT solutions provider and longstanding ODM partner of DSG, will have the right to manufacture and sell products based on our designs. We are focused on ensuring the DSG team and its stakeholders are supported during this transition."

Most of Intel DSG servers were sold outside of the U.S. and were particularly popular in South America, according to STH. While the company did not have a broad lineup of server systems, it could satisfy general needs and even offered machines based on its unique Xeon Platinum 9200-series CPUs for heavy duty and high-performance computing applications as well as systems with GPU and accelerator support.

Interestingly, but it looks like Intel has been winding down its server business for several quarters now. First, it ceased to push its Data Center Blocks and Data Center Systems systems, yet kept offering them. Secondly, it supplied QCT's Sapphire Rapids-based machines for evaluation to specialized press. Meanwhile, Intel does have its own Sapphire Rapids-based server machines.

After Pat Gelsinger became the chief executive of Intel, the company abandoned a number of businesses, including 3D NAND memory and SSD business, Optane SSD business, notebook modem business, and Barefoot switching business. This has been part of a broader effort by the company to focus on fewer core businesses, where Intel has more control and, ideally, greater profitability.

Exiting the server system business is, on the whole, one of Intel's less surprising moves. It is a highly-competitive business with far more limited margins than the individual components Intel provides. Or as ServeTheHome succinctly notes "Intel’s core, high-margin business here is selling silicon, not sheet metal."

Intel's DSG offerings should fit nicely into MiTAC's lineup of products. The ODM, which is also the parent company of Tyan, has a much larger share of the server market and multiple brands under which they can sell these systems. 

Sources: ServeTheHome, Tom's Hardware