Intel acquisitions fortify future network role

Intel acquisitions fortify future network role

When Intel demonstrated its Bluetooth wireless products in December, the firm was doing more than showing off another leading-edge technology - it was once again bolstering its rapidly developing status as a major player for small, midsize and even enterprise business customers.

In the past five months, the chip giant has spent more than $US2.15 billion to buy five companies, fortifying its virtual private network (VPN), IP telephony and network management technologies with acquisitions such as Ipivot's e-commerce management equipment, DSP Communication's wireless chipsets and software, and Parity Software Development's software for IP telephony applications.

Intel is also playing a larger role in the network security arena. Most recently, it announced a partnership that observers called significant with Check Point Software Technologies, one of the top five Internet security vendors worldwide, according to research firm International Data Corp (IDC) estimates.

Intel's strategic partnerships and product offerings are helping it make a bigger mark on not only the PCs, workstations and servers its chips inhabit, but also the networks to which they are connected. The bottom line: Intel's business and technology strategies will drive demand for its high-end chips and help prevent commoditisation for the company's other products, including network devices, say industry observers.

`Intel has a pretty good size network division, and a number of products that use various security functions to add value to those network products,' says Abner Germanow, a senior IDC analyst. Germanow says Intel's strategy of incorporating high-level features into otherwise simple products is shrewd. The strategy allows the company to avoid falling prey to the normal price declines that affect those markets.

Additionally, he notes, Intel's contributions give the company power over areas it would otherwise not have access to, particularly with regard to security and e-commerce.

With agreements such as the one with Check Point, which will combine Check Point's Secure Virtual Network firewall software with Intel's IX programmable silicon architecture, Intel will in the future drive security into new specialised chips and chipsets for network products. The moves not only give Intel access to the network security market, but also more control over it.

From Intel's point of view, its expanding role in the network and network security market is a natural progression. Len Rand, Intel's general manager for IX Architecture operations, says that as networked PCs continue to grow in importance, so will network equipment for Intel. Rand says Internet-related technology, particularly e-commerce, will be a focus for Intel over the coming year as the company rolls out new technologies.

One challenge Intel may need to address in the coming year is that end users don't yet recognise the company as significant beyond the chip arena, probably because the technology is often embedded. In the small to midsize business market, the consequences may be less harmful than in the enterprise market, where brand name counts.

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