Intel VC fund targets ASPs, wireless

Intel 64 Fund recipients are likely to include security, location, and personalization specialists.

With US$250 million of the Intel 64 Fund's US$400 million still left to be spent, Intel and its OEM and Global 500 corporate partners are getting set to expand their venture capital (VC) funding program beyond Internet infrastructure into players in the telcos/wireless and biomedical arenas.

The US$400 million fund, dedicated to development around Intel's 64-bit Itanium chip, probably will name the first recipient in the telco/wireless market about three or four weeks from now, said Intel 64 Fund director John Couleur, speaking at a press event on Wednesday in New York City.

Even sooner than that, Intel is likely to announce a couple of recipients specializing in "ASP infrastructure," an area Couleur sees as belonging under the general rubric of "Internet infrastructure," the fund's original main target.

Initially set up last year as Intel's first external investor VC fund, Intel 64 involves two types of partners. OEM partners Hewlett-Packard, Compaq Computer, Dell, SGI and NEC provide technology support.

Beyond that, 14 early bird enterprise allies offer up test sites and sales opportunities. Morgan Stanley Dean Witter helps administer both the OEMs' operating fund and the corporate Early Adopter Fund.

But there's also the financial investment aspect. To date, Intel 64 has divvied up a little more than US$150 million in funding across 40 recipient companies. Most of the first crop are Internet infrastructure providers, although some fall into related categories like e-commerce and manufacturing/financial verticals.

The initial 40 recipients range from intellectual property specialist Authentica to Demantra Management, a maker of demand management systems. Others include Xuma, WebPlan, Oasis Technology, Black Pearl Computing, Iona Technologies, Lutris Technologies, Extricity, Selectica, SteelEye Technology, Monterey Design Systems, TimesTen Performance Software and MOAI.

At this point, though, Intel is "finding fewer places where we can add strategic value in terms of Internet infrastructure," according to Couleur. "We're keeping a dynamic view," he added.

Within the ASP infrastructure category, likely funding recipients include security specialists, Couleur said.

In the telco/wireless space, Intel 64 is mulling markets that include location services, personalization, unified access and back-end databases. "But we're still looking for hot spots," he said.

Interest is also keen at Intel 64 in biomedical firms specializing in genetic or protein analysis, for example, along with Internet verticals beyond the previously targeted manufacturing and financial arenas.

The Intel 64 recipients already named claim to be getting sales leads and partnership chances, in addition to the cash. Internet infrastructure provider Xuma, for instance, is currently considering setting up alliances with a couple of other Intel 64 recipients, said Xuma executive Jeffrey Yoshimura, also at the press event.

Exposure to Intel 64 corporate partners like Ford and General Electric doesn't hurt a whit, either, according to Yoshimura.

For its part, Intel has already garnered about 500 software applications for Itanium, many of them created by Intel 64 beneficiaries. The applications are currently being ported over from Windows and Unix, with end-user pilots also under way this quarter.

But Itanium won't be the only high-end processing system on Earth. Xuma, for instance, has now established an Itanium practice. "Itanium, though, is only one of several good platforms we're working with," Yoshimura maintained.