Cloud companies consider Intel rivals after security flaws found

SAN FRANCISCO, Jan 10 (Reuters): Some of Intel Corp's data centre customers, whose thousands of computers run cloud networks, are exploring using microchips from the market leader's rivals to build new infrastructure after the discovery of security flaws affecting most chips.
Whether Intel sees a slew of defectors or is forced to offer discounts, the company could take a hit to one of its fastest growing business units.
Intel chips back 98 per cent of data centre operations, according to industry consultancy IDC.
Security researchers last week disclosed flaws, dubbed Meltdown and Spectre, that could allow hackers to steal passwords or encryption keys on most types of computers, phones and cloud-based servers.
Microsoft Corp said on Tuesday the patches necessary to secure the threats could have a significant performance impact on servers.
Intel will help customers find the best approach in terms of security, performance and compatibility, it said in a statement on Tuesday.
"For many customers, the performance element is foremost, and we are sharply focused on doing all we can to ensure that we meet their expectations."
Alternatives include Advanced Micro Devices, which shares with Intel a chip architecture called x86, or chips based on technology from ARM Holdings or graphics processing chips, which were developed for different tasks than Intel and AMD's central processing units, or CPUs.
For Gleb Budman's company, San Mateo-based online storage firm Backblaze, building with ARM chips would not be difficult.
"If ARM provides enough computing power at lower cost or lower power than x86, it would be a strong incentive for us to switch," said Budman. "If the fix for x86 results in a dramatically decreased level of performance, that might increasingly push in favour of switching to ARM."
Infinitely Virtual, a Los Angeles-based cloud computing vendor, is counting on Intel to replace equipment or offer a rebate to make up for the loss in computing power, Chief Executive Adam Stern said in an interview.