Why Isn't Intel Corp.'s New Xeon Scalable Family Driving Faster Growth?

Last quarter, Intel's (NASDAQ: INTC) data-center group (DCG), which sells processors and other components that power most of the world's data centers, saw revenue grow 7% year over year. That growth was driven by a roughly 7% sales increase in platforms as well as an approximately 16% increase in sales of non-processor/chipset components -- what the company refers to as "adjacencies."

Though a 7% increase in sales isn't awful, it's below Intel's "double-digit" long-term revenue growth target for the business. Moreover, the relatively anemic growth comes hot on the heels of the introduction of Intel's new Xeon Scalable processor family, which the company touted as "the industry's biggest platform advancement in a decade."

Analyst Stacy Rasgon pointed out during the company's earnings conference call that despite the launch of these new Xeon Scalable chips, Intel's DCG platform revenue didn't accelerate. The analyst, considering this, asked management to explain why the new platform isn't driving such an acceleration.

Source: Fool.com