Processor and chip giant Intel Corporation (NASDAQ:INTC) has announced its plans to pay $20 million for security software startup Sensory Networks. The Santa Clara, CA, company’s acquisition shows a shift for Intel away from its core business. Sensory Networks creates pattern matching and acceleration software.Both companies confirmed the deal in statements to CNET today, with each declining to speak of the deal terms. Intel did, however, make it clear that any revenues contributions from Sensory Networks are not germane to the chip maker.
Intel’s deal with Sensory Networks
“We’re very pleased with the deal and to us it culminates almost [five] years of very hard work that started with the restructure of Sensory Networks in 2009 under Sab Gosal (our CEO), myself (as CTO) and with a very small team of employees ([three] engineers in the Sydney office),” Sensory Networks Chief Technology Officer Geoff Langdale told CNET via e-mail. “We’ve shown that a tiny team can yield world-class results and sell technology to Tier 1 network providers.”
While the move is a shift for Intel Corporation (NASDAQ:INTC), it is not its first acquisition of a software company and it is just a drop in the bucket, price wise, compared to other purchases. In early 2009, Intel paid $884 million for Wind River Systems that built software to help run cell phones and other embedded systems.
Intel acquiring McAfee
Intel Corporation (NASDAQ:INTC)’s largest software company purchase by far was its acquisition of McAfee in 2010 when it paid nearly $8 billion for the security software company. Intel’s thinking at the time was that rather than detection and a response to computer infections, it would be better served to combine McAfee’s software and its hardware during the manufacturing process.
Intel Corporation (NASDAQ:INTC) has struggled to gain a foothold in the mobile market which is growing at exponential rates as users switch from PCs to tablets. It’s key that Intel expands outside of its PC chip business in order to realize future growth. Intel is clearly keen on making sure that its developing cutting edge software as its core business lags.
Sensory Networks has a mere five employees and was founded by Australian technology entrepreneurs ten years ago. The company is now stranger to Intel having worked with both Intel and with Wind River on a number of projects. Additionally, Sensory networks has worked with Intel rival(?) and chipmaker Cavium.