Paul and Thread - Another Networking Acquisition: NetBoost
Fleshing out this strategy, Intel today announced that it has entered into a definitive agreement to acquire privately held NetBoost in an all-cash transaction. NetBoost, headquartered in Mountain View, California, develops and markets hardware and software for communications equipment suppliers and independent software sellers in the networking and communications markets.
news.com
Intel strides into network chips with new products, fund
By Michael Kanellos
Staff Writer, CNET News.com
September 1, 1999, 6:10 a.m. PT
update PALM SPRINGS, California--Intel will enter the networking processor market with a bang later today when it rolls out a new line of processors for telecommunications equipment and a $200 million venture fund geared to attract allies to its cause.
The multipronged approach, to be unveiled later today at the Intel Developers Forum here, will leave little doubt that the chip maker wants to be a player in the growing market for chips that power telecommunications equipment.
Fleshing out this strategy, Intel today announced that it has entered into a definitive agreement to acquire privately held NetBoost in an all-cash transaction. NetBoost, headquartered in Mountain View, California, develops and markets hardware and software for communications equipment suppliers and independent software sellers in the networking and communications markets.
The strategy will largely center around the Intel Internet Exchange Architecture, or IXA, the blueprint for a new family of networking chips, according to Mark Christensen, vice president and general manager of the Networking Communications Group at Intel.
The IXA in many ways reflects the strategy that Intel has adopted in the PC industry. At the heart of the effort sits the IXP 1200, a processor set built around technology acquired from Level One, Softcom, and Digital. The chip will essentially serve as the traffic controller for PBX boxes, routers, and other telco equipment.
Complementing the chip, Intel will also release 12 other products that will allow the IXA 1200 to be placed into a variety of systems, ranging from basic communications servers, to multiple processor systems, voice-data network solutions, or to serve as the engine behind virtual private networks, a relatively deluxe service from communications carriers that allows parties to engage in protected communications that are not hooked up to the same internal network.
By developing several generic building blocks, Intel hopes to squeeze into as many sub-segments of the market as possible.
"We want to sell in millions of units, not tens of thousands of units," he said.
In PCs, Intel has largely taken a core processor, most recently the Pentium II and III family, and surrounded it with complementary products to fit into as many segments as possible.
How will Intel succeed in a market where there are already a number of companies delivering similar products? For one thing, Intel's products will be cheap, costing less than $200 in volume, and will be programmable, which means that they can be used in a fairly wide variety of devices. Second, the company comes to the table with cash and influential allies.
As part of the strategy, Intel has created a $200 million communications fund that be used to seed investments with start-ups and established companies interested in collaborating with Intel on bringing the IXA architecture to prominence.
The company will also continue to buy networking companies as the telco equipment industry begins to narrow down the variety of building blocks it uses to create its products. Earlier this year, the company acquired Level One for $2.2 billion.
"We're going to continue to acquire companies," said Christensen. "This is a very competitive industry. I don't think there is room for two dozen architectures."
NetBoost, which Intel plans to acquire, provides hardware and software that is based on a programmable model, much like that for PC industry. This allows for timely, widely-available software upgrades and enhancements. NetBoost applications enable information system managers to monitor, manage, and control network traffic generated by the growth of the Internet and e-business.
The company has also begun to line up customers. Cisco, among others, will announce that it will add IXA technology into some of its telecommunications equipment.
Cisco also announced a deal yesterday to work with IBM on a similar family of networking processors.
Other companies are expected to announced their support for Intel's products this morning. CAG Technologies, which specializes in chips for virtual private network systems, announced it will adopt the IXA1200 for its equipment while Wind River Systems, which makes operating systems for industrial equipment and other devices, said it will adapt its products to the IXA. Others include Broadband Access Systems, Cabletron, Newbridge Networks, Omneon Video Networks, and T.Sqware.
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