Cloud Fieldnotes

Intel Acquired Mashery Because They Understand Modern IT

Yesterday, Intel‘s acquisition of Mashery, an enterprise API company, went public and Alex Williams of Techcrunch puts the price at $180 Million. Intel is a chip maker and Mashery is an API company focussed on services world. Intel will put Mashery team in their services division. Industry watchers are surprised by this acquisition and are predicting that Intel is slowly transforming itself to be a software company. In our opinion, Intel is repositioning themselves to offer enterprises what they do in their internal IT. Let me explain below.

Anyone following the cloud industry will know that Intel IT, their own internal IT department, has fully embraced cloud computing both at the infrastructure layer as well as the platform layer. Myself and Alex Williams had a chat with Das Kamhout from Intel IT as a part of our Open Conversation series (video embedded below). Das clearly explained to us how Intel sees enterprise IT as one that is moving from the traditional IT approaches to a modern services based IT. He pointed out that Intel is approaching the service oriented IT transformation with a clear emphasis on API based consumption. In fact, he once again highlighted Intel’s approach to services oriented IT during his keynote at the recently concluded Deploycon conference at Santa Clara.

Whatever IntelIT is doing is an example of what every enterprise will be doing going forward. The enterprise IT infrastructure is going to transform to support the services world. API’s are going to be the lingua franca in this world even going deep into infrastructure. Intel clearly understands this trend not just from their own IT but, possibly, from some of the ODCA members as well. Now take into account Intel’s investments on open source technologies like OpenStack, Hadoop, etc.. During Strata, they even announced their own Hadoop distribution. Putting all this together, I feel that Intel is not just entering into the software domain, they might even come up with the infrastructure for modern IT. From their chips to ODCA blueprints to Open Source Technologies like OpenStack and Hadoop (may be, we might see some announcements on the Platform layer soon) to Mashery acquisition, it is pretty clear that Intel is moving towards offering enterprises a comprehensive solution for modern IT. When Intel comes out with such an infrastructure, APIs are going to be key and it may even extend to chip level. With DevOps culture gaining ground inside the enterprises, we may even see scenarios where applications might require control at the chip level. Imagine an intelligent application that manages the performance, efficiency, security, etc. of its underlying infrastructure with a granular level control. The possibilities are endless. If we just think in terms of abstractions, we might miss some of the innovations organizations could have with deeper granular control. Intel, being one of the innovative companies in the past, clearly sees these possibilities and are getting ready to handle the needs when the world turns over.

No, I don’t have any inside information. Yes, Intel is far away from being prepared to offer such a comprehensive solution. But if we take into account their current market position in the wake of IT transformation aided by cloud and mobile adoption in the enterprise and follow their investments, it is easy to see where they are heading. Let us keep in mind this is pure speculation at this point but as someone who has been closely monitoring the enterprise IT segment, I think I can make a reasonable speculation on where Intel is headed. Feel free to jump in and offer your thoughts.

This entry was posted on Thursday, April 18th, 2013 at 8:52 pm and is filled under: M&A