Intel Readies IA-64 ISV Investment Fund

Computergram International, May 11, 1999

Intel Corp is bankrolling new a $250m venture fund which will invest in companies developing applications for its IA-64 architecture, beginning with Merced. Intel's coughing up $100m; other investors include those that need Merced to succeed most, including Compaq, Dell, HP, NEC and Silicon Graphics. Morgan Stanley will represent other Wall Street and corporate investors in the fund, such as Bank of America, Circuit City, Cord, GEC, Reuters, Sabre, SmithKlein Beecham and Sumitomo. Intel, which already operates one of the largest venture capital funds in Silicon Valley clearly feels that it needs to put some momentum behind the Merced ISV market as well as targeting systems and software developers who are hanging back until subsequent IA-64 generations become available. After all it is the volume of applications available which determine the success of any microprocessor architecture. Most vendors regard McKinley, due in 2001, as the first in the IA-64 family, which will be suitable for use in enterprise systems. Like other funding, there's unlikely to be much revenue generated for at least a year after initial investments are made.

The fund - Intel 64Fund LLC - has already identified a list of potential targets, but has not yet made any investments. Intel says it will invest sums of between $3m and $5m in companies writing applications or shrink-wrapped operating systems for Merced. It specifically has its eye on system design tools, design automation, financial, e-business, digital content creation, internet, directory services and authentication programs - including symmetric multiprocessing apps - software which more traditionally runs on RISC platforms.

Intel says the time is right because tools and silicon for ISVs are just about to become available; Merced samples will be available in a couple of months (it wouldn't say whether the part has taped out) and fully-functional systems will be available by mid-2000.