Intel and NEC in major Internet pact

Intel Corp. and NEC this week have signed a major pact to jointly provide Internet services. In the late 1980s, Intel and Japan’s NEC were embroiled in one of the most bitter court battles with Intel accusing NEC of illegally copying its 8086 microprocessor designs.

Under the terms of the deal, NEC will use Intel’s new global network of Internet service facilities, the first of which opened this week in Santa Clara. NEC's Internet online service, known as "Biglobe" will gain access to global markets and thus expand NEC’s e-commerce business. In return Intel will get access to NEC's extensive domestic Japanese networks and expertise in systems integration.

Intel has already announced plans to open a $100 million data service center in Tokyo. The facility is scheduled to come online in the first quarter of next year. In all, Intel is planning to spend $1 billion on its new network of data centers, each of which will have 5,000-10,000 servers installed. NEC president Koji Nishigaki said NEC plans to provide Japanese customers with easy-to-use Internet terminals that Intel is developing. The systems should be available by the end of this year. The Intel deal is a cornerstone of a massive corporate restructuring plan that was also announced in Tokyo this week. NEC wants to position itself as an Internet-focused company.