Intel has already planned its future, and the chances for its competitors entering this space are thin. Diane M. Bryant, who heads up Intel’s business in chips for industrial-sized computing centers, said, “A new world is coming, and it is inevitable. Everyone has to act differently.”
Intel investing in future
Intel’s venture arm plans to invest $100 million in software used for cloud computing. For making computing systems bigger and more efficient, this method is becoming increasingly popular.
Intel will lead a $100 million equity investment in Mirantis, a start-up specializing in open-source cloud software. The chip maker will also be investing in bolstering its own resources to work with Mirantis-type products, says a report from The New York Times, which cites several people aware of the deal between the two companies. Intel was also part of Mirantis’ $10 million investment round in 2013. And last year, the chip maker joined another group of Mirantis investors.
Apart from Intel, other investors in Mirantis include Ericsson; August Capital, the venture-capital arm of software maker SAP SE; and Insight Venture Partners. Goldman Sachs is also investing in the startup. Last year, Mirantis raised $100 million in a funding round led by August and Insight. So far, the company has raised around $220 million, but its valuation details have not been made public. Mirantis has a big client list that includes names like Samsung, The Gap, AT&T, PayPal and Ericsson AB.
How Mirantis could help Intel
OpenStack is a similar software manufactured by several of Intel’s long-time partners, such as Hewlett-Packard, Dell and IBM. Some time ago, Intel would have been happy to rely on its partners, but now it is walking the path that has been chosen by most of the older tech giants in the past few years. It is relying on young but fast-growing companies to help it remain competitive in the market.
“Companies like AT&T and Goldman Sachs have realized that their future businesses are all enabled by software in the cloud,” said Mirantis CEO Adrian Ionel. This helps startups like Mirantis, as “the old enterprise companies can’t help them there.”
Mirantis could help Intel in the server chips segment, which is the chip maker’s second-largest segment, recording a growth of 10% in the last quarter. Mirantis’ software, which is a so-called open-source product, supports around 50 computer servers, but Intel aims to raise this number to 1,000 servers.