Intel snaps up IPivot

SANTA CLARA, CALIF. - Intel last week announced that it would spend $500 million to acquire IPivot, a company whose Web traffic acceleration and load-balancing products should bolster Intel's growing Internet product and service business.

Intel has been aggressively building its Internet business this year, turning heads with its own Web-hosting business and snapping up electronic commerce technology vendor iCat.

It's still unclear what Intel's exact long-term plans are for IPivot's products, which off-load e-commerce authentication chores from Web servers and balance traffic loads at Web sites.

In the short term, Intel plans to pitch the products to ISPs and sell them to enterprises via OEM partners.

It would seem likely that Intel could use the technology at its new Web-hosting data centers and perhaps combine IPivot technology with other acquired technology, such as Shiva's virtual private network offerings. But company officials say it is too soon to divulge such plans.

The acquisition of IPivot, as well as Intel's other Internet-related moves, represent an expansion of the company's network strategy. Intel has spent some $4 billion this year on a variety of network-related firms (see graphic).

The company focused its early network efforts on traditional enterprise network gear, largely for small and midsize businesses. The company now offers network gear from adapters and hubs to switches and Web site load balancers, as well as a host of component-level products.

A big part of Intel's network strategy is to help companies build high-speed networks that support computers requiring faster and faster Intel processors, says Craig Johnson of the PITA Group in Portland, Ore.

"Intel is doing the same as it has always done - expanding its networking, communications and services business," Johnson says. "With the IPivot acquisition, Intel wants to drive up the bandwidth, availability and services it offers so people will buy more Intel products."

While Intel's network business has grown quickly in the past few years, it still accounts for less than 10% of the company's revenue.

IPivot, based in Poway, Calif., was founded in 1997 and has 100 employees. i