Intel Investing $10M in Endeca

The chip maker's interest in an enterprise search company is part of a push to grow demand for its multi-core processors.

Intel Capital is investing $10 million in Endeca Technologies, a company that competes against the likes of Google, IBM and others in the enterprise search market and is developing new information access software built around access-optimzed databases.

Intel Capital, which made the announcement Jan. 23, is the chip maker's investment arm. This part of Intel is responsible for investing in companies, such as Endeca, that are developing new technologies with greater capabilities that require enhanced hardware performance, which then creates demand for Intel's high-performance processors.

In this case, the $10 million investment in Endeca, which announced a new software suite in September that allows user-generated content such as reviews and ratings to be included in searches, is a way for Intel to begin talking about the benefits of developing software that takes advantage of its multi-core processor technology.

The investment also shows Intel's interest in having companies use its chips and server platforms to help optimize Web 2.0 technologies.

"Information access platforms play a crucial role in linking vast collections of data," Arvind Sodhani, president of Intel Capital, said in a statement. "Our investment in Endeca will further their capabilities by capitalizing on Intel's next-generation multi-core platforms in this market segment."

Intel has been selling quad-core, x86 processors for servers and desktops since November 2006. Later this year, the chip giant plans to release a new microarchitecture, called Nehalem, which will allow it to offer new chips that scale from one to eight cores. In addition, Intel's software division is working to create new tools to help developers and ISVs to take advantage of its multi-core technology and parallel programming.

John Spooner, an analyst with Technology Business Research, wrote in an e-mail that Intel's latest investment follows a familiar pattern that allows the company to seek out new technologies that benefit its own chip development.

"Its investment in a company such as Endeca is an investment in its future server business, given that Endeca is building its information access software around a new class of database technology, which undoubtedly benefits from high performance hardware," Spooner wrote.

For example, in 2007, Intel Capital invested more than $200 million in VMware before the launch of the company's successful IPO (initial public offering). This showed how much importance Intel is placing on the proliferation of virtualization technology and that its chip platforms can help businesses take advantage of virtualization in the data center.