Intel to back Linux hardware outfit

An investment in VA Research gives it a matched software and hardware set

Intel is due this week to announce another one of its small investments in a Linux specialist -- VA Research, this time. VA produces Intel-based machines running Linux, and alongside Red Hat, which Intel put money into last year, gives the chip giant a matched set. Intel habitually downplays what you might call its pseudo-venture capital activities. The company puts quite a lot of money into promising young companies every year, but tries to avoid the investments being interpreted as strategic. If it talks about them at all, the company claims that all it's doing is helping grow small outfits whose activities will help Intel sell more chips. Intel usually manages to turn a neat profit out of its investments, however. With VA, the investment can to some extent be seen as an extension of existing activities. As an Intel-based manufacturer VA's relations with Intel are already close, and it uses Intel Financial as a leasing partner. It also co-operates closely with Oracle (so we shouldn't rule out an Oracle investment too), and its current backer is VC outfit Sequoia Capital. But despite the soft pedaling, the Linux investments have added complications for Intel, because the company has been quietly boosting Linux -- and Unix in general -- while trying to avoid destabilising its Microsoft-based business. Recent Intel comment that Linux would be massive, but wouldn't make it on the desktop (see Intel says Linux unstoppable) is an indication of the balancing act the company is performing. That too could be seen as an increase in Intel's enthusiasm for Linux, however -- does the company see Intel-based Linux servers as the engine that will push Microsoft back to the client? VA doesn't just produce servers, of course. It offers clients and Linux laptops as well, so by putting money into the company Intel will be encouraging the growth of Linux outside the server market anyway. Meanwhile Oracle's VC arm, the Oracle Venture Fund, is shortly due to announce that it will be joining Intel and Netscape as an investor in Red Hat. ®

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