Intel Gets Virtual With Latest Investment

Intel Capital, the chip maker's investment arm, is helping along Virtual Iron Software, the maker of virtualization software for corporate data centers.

Intel is funding a new twist on virtualization.

The Santa Clara, Calif., chip maker on Monday announced a partnership with Virtual Iron Software Inc., an Acton, Mass., startup whose product offers data center-level virtualization. Intel Corp. also said that its Intel Capital arm, along with other investors, granted $8.5 million in venture capital to Virtual Iron.

Virtualization, the practice of splitting up a computer so as to run different types of software on it, has been receiving more attention from Intel of late as the company has shifted it focus from selling individual processors to designing complete platforms for computers such as servers.

Under the new strategy, Intel has begun infusing those platforms with special features, including virtualization, which bolsters their capabilities. Intel will begin shipping dual-core Xeon platforms, which include the new virtualization capabilities, within about a month, the company has said. Intel also plans to build virtualization into its desktop and notebook PC platforms at a later date.

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Virtual Iron says, under its partnership with Intel, it will build on the virtualization technology already supplied by the chip maker. Virtual Irons software, dubbed VFe, creates and manages a virtual pool of resources derived from multiple servers, storage systems and computer networks, the company says. It says that VFe allows a company to automate tasks such as provisioning new servers and shifting resources to areas where they are needed, in addition to allowing software to run on any machine.

Virtual Iron said that it would use the $8.5 million in funding to further develop its products as well as expand its marketing and sales activities.

Intel also recently lent its support to a plan by VMware to open source its virtualization technology for x86 servers.

Intel Capital, meanwhile, has been investing in numerous other areas, including computer security, of late.

Earlier this month, the Intel investment arm announced funding for Grisoft, a security software maker based in Prague, Czech Republic.

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The Grisoft investment, under which Intel put up $16 million for a minority equity stake in the firm, was designed to ensure greater availability of anti-virus software in Eastern Europe, the chip maker said.

Intel Capital, which invested about $130 million worldwide over 110 deals in 2004, continues to look at other security companies, both inside and outside the U.S.—about 40 percent of its 2004 investments were international—that align with its interests.

"Were looking at Central Europe and Eastern Europe and looking at companies that can help us accelerate critical infrastructure there," said Chris Lawless, a senior investment manager at Intel Capital, in an interview with Ziff Davis Internet, earlier this month.

"Certainly there are much more opportunities for us to sell our chips" in less saturated markets than the United States, he said.

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