Is Software Intel's Best-Kept Secret?
Semiconductors are the silicon-based bread and butter for Intel, but what used to be the company's "best-kept secret" is anything but these days.
With each new acquisition and news announcement, Intel's Software and Solutions Group steps farther away from the shadows. Intel has always had a software arm, its origins rooted in the need to create tools for customers who would otherwise not be able to do anything with the silicon Intel produced. Today, in addition to providing software to support its chips, Intel is expanding its software focus into more tightly integrated product lines, such as phones, embedded products and tablets.
"Software has been Intel's best-kept secret up until the past couple of years," said Renée James, who, as senior vice president and general manager of Intel's Software and Services Group, is responsible for making sure Intel hardware and software work together. But it is more than just compatibility. James is also tasked with how Intel offers a profitable complete software stack on top of its silicon.
"Intel is no longer a silicon company only," James said, acknowledging the growing importance of software in everything from laptops to smartphones. "We need to expand our capabilities and build more of the product stack."
A key to fulfilling this need and growing capabilities sought quickly is acquisitions. In 2009 it was embedded software company Wind River for $884 million, and a few months ago Intel spent $7.68 billion on security software powerhouse McAfee. Intel President and CEO Paul Otellini has said that security will become one of the key "pillars" of computing alongside energy efficient performance and connectivity.
Even before the McAfee purchase, Intel said that its software group would be among the world's Top 10 software companies if it were an independent organization. It got there with names that are anything but household: Havok, Rapid Mind, Offset, Sargeva, OpenedHand, Virtutech, Cilk Arts, Neoptica, Elbrus/Unipro, Swiftfoot Graphics. Whatever the level of recognition each has, these high-tech companies share one key commonality that is a household name: Intel.
Not a software empire
James insists Intel is not trying to build a software empire with a flurry of acquisitions. And don't even think about calling either Intel or its software chief a collector of companies.
"I bristle at that notion," James said from her Hillsboro, Ore. base. "I think measuring the corporation or your personal accomplishments by the number of companies or the size of the organization falls in the same category as measuring the title you have. It's what you do and contribute, and I've seen a team of 40 people do the most amazing work. It's not the number of people or individual companies."
Similarly, Otellini has said he doesn't have an acquisition strategy per se, but instead will look to add strength in existing areas where it makes sense to support current business objectives. Expanding through acquisitions is actually standard operating procedure in the software industry, according to James.
"Software companies in general are usually small groups of people with wonderful ideas and aspirations," she said. "Many, many companies are built through those pieces coming together into a platform. Microsoft was built through a series of acquisitions, Oracle the same way. Our software group is no different."
James, herself, is a result of an acquisition. She joined Intel in 1988 with the purchase of Bell Technologies.
The not-so-softer side of Intel
SSG operates in more than 20 countries, and under the well-traveled James the division takes on developer programs along with building and distributing software and services. Throwing the future in the equation, in the form of R&D of next-generation software, the softer side of Intel is anything but soft - not when the company literally puts its money where its mouth is with a single wave of a wand worth nearly $8 billion.
Once a wholly owned subsidiary of Intel, reporting into James, McAfee will satisfy a core capability in software the company needed as part of its overall computing platform, James said.
"Hardware-enhanced security will lead to breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow," James said at the August announcement. "This acquisition is consistent with our software and services tactic to deliver an outstanding computing experience in fast-growing business areas, especially around the move to wireless mobility."
James, who declares herself "a lucky person" to have the ardent support of internal staff and leadership along with "amazing CEOs" from acquired companies, said she relishes playing a key role in the company's shift from being a world leader in silicon innovation to what Otellini, her boss, describes as a full-fledged "computing company."
Besides acquisitions, James and her group also orchestrate key collaborations between tech industry leaders with common interests. One such endeavor is MeeGo, a Linux-based software platform that supports multiple hardware architectures across a broad range of device segments. Spawned by a merger of Intel's Moblin and Nokia's Maemo projects, the MeeGo operating system, coupled with the Intel AppUp application store for Atom-based devices, has "made software a vital piece of Intel's efforts to win in the tablet and handheld devices space," according to Greg Richardson, analyst with Technology Business Research.
From PCs to smart phones to tablets and cars, as well as any number of Internet-connected consumer devices, James and her team clearly have their work cut out for them.
So where does Intel want to be inside next?
"I don't know that I have anything specific in mind," James said. "I think we're always looking for areas where software is pushing the edge or what can be done to take silicon in a new area like embedded, devices or what have you.
"It's about assembling disciplines, and I'm sure there's something out there. It's just a matter of where or when."