Intel Data Center, Internet of Things Groups Grew Fastest in 2014

Intel reported a 6 percent increase in annual revenue, with its data center and Internet of Things groups growing at much faster rates than others. The company’s Mobile and Communications Group saw a sharp drop in annual revenue, which was down 85 percent from the previous year.

Intel made $55.9 billion in revenue total in 2014. The company reported $11.7 billion in net income for the year – up 22 percent from 2013. Its earnings per share were $2.31.

This was the first full year Intel’s current CEO Brian Krzanich has been at the helm. He succeeded previous chief exec Paul Otellini in May 2013, after serving as chief operating officer for about 1.5 years.

The Intel Data Center Group, led by its general manger and senior vice president Diane Bryant, continued to outperform all other units in the fourth quarter, like it did in previous quarters. The group’s Q4 revenue was $4.1 billion – up 25 percent year over year. Its full-year revenue was $14.4 billion, or 18 percent higher than in 2013.

The group makes processors and other components for servers, workstations, networking, and storage hardware. In addition to off-the-shelf products, the group has been growing its business of making custom chips for major cloud service providers and hardware vendors. Some of the deals in this category the company has talked about publicly include custom chips for the latest high-performance C4 instances on Amazon Web Services and for Oracle's latest Exadata database machine.

Company leadership expects the Intel Data Center Group’s revenue to grow at an average 15 percent annual rate through 2018. At the company’s Investor Day event in November, Intel execs said the group would potentially generate $24.66 billion in revenue and $9 billion in profit by that year.

The PC Client Group, which contributes the biggest portion of the company’s total revenue, reported $34.7 billion for the year – up 4 percent from the previous year.

The third-biggest portion of annual revenue came from software and services operating segments, which generated $2.2 billion in sales for the year, albeit it was only a 1 percent year-over-year improvement.

These segments include the company’s Software and Services Group, which builds software for Intel-based products, and the Security Group (formerly McAffee, which Intel acquired in 2011).

Revenue of the Internet of Things Group grew 19 percent in 2014, reaching $2.1 billion. This group designs embedded chips for network-connected devices.

“There is more to do in 2015,” Krzanich said in a statement. “We’ll improve our profitability in mobile, and keep Intel focused on the next wave of computing.”