Friday, October 7

Intel wants to return to the software business after years of failure


Despite the fact that Intel is the most important company in the world of semiconductors, which is why it is the company that sells the most processors in the world (in the computer sector), the company’s businesses in the field of software have never been its forte. .

Intel is in the midst of trying to revive its chip-making machine (which is badly affected by the global crisis), as well as building a software sales business for the second time in less than a decade.

In recent months, Intel CEO Pat Gelsinger has not been shy about the company’s software revenue ambitions. By the way, the computers are about to go up.

In May, the CEO lamented Intel’s missed opportunity to monetize many of its technologies that became the foundation of cloud computing over the years.

Last year, the chipmaker earned more than $100 million in software revenueand Gelsinger wants to increase that number by 50% this year through products developed in-house or acquired.

It has made it clear that it wants to make even more software acquisitions in the future, focusing on companies that have used software as a service. These numbers may be small compared to Intel’s roughly $70 billion in annual revenue.

But Gelsinger believes commercial software will have a “grossly disproportionate business benefit“by making the company’s chips and hardware platforms more attractive.

To some, however, Intel is trying too hard to build a software business while tries to recover from years of manufacturing errors as they tried to outperform Asian giants TSMC and Samsung.

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Intel has an existential threat around its process technology, its manufacturing technology. You have to figure that out, and anything other than that is just a distraction.“Analyst Jay Goldberg of consultancy D2D Advisory told The Register.

What also makes people like Goldberg skeptical is that Intel has already tried to push commercial software in recent history, and the effort lasted less than a decade.

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Goldberg, for those who do not remember, refers to the period when Intel owned the antivirus giant McAfee and from industrial operating system provider Wind River, its most prominent business software efforts.

Intel bought McAfee in a deal valued at $7.68 billion in 2011. with the promise that it would integrate “deeply“McAfee software with its chips for”add substantial value to your platforms.”

That era came to an end in 2016 when Intel sold a majority stake in McAfee, which for a time was renamed “Intel Security,” to private equity in a deal that valued the company at $4.2 billion. Will Intel win this time?

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