Must-know: Intel’s software and services strategy

Software and services overview

Intel Corporation’s (INTC) software and services segment, or SSG, includes software products for endpoint security, network and content security, risk and compliance, and consumer and mobile security. It includes McAfee and the Wind River software group. This segment was formed in 2011 to expand Intel’s presence beyond processors and hardware.

If Intel’s SSG segment continues to do well, it will benefit the VanEck Vectors Semiconductor ETF (SMH), the PHLX Semiconductor ETF (SOXX), and the First Trust NASDAQ Technology Dividend Index Fund (TDIV) that have high exposure to the company.

McAfee and Wind River acquisitions

In accordance with its mobile strategy in 2010, Intel acquired McAfee for ~ $7.7 billion. McAfee is known worldwide for developing a broad range of security software for users and enterprises, including antivirus applications, firewalls, and intrusion protection systems. Intel acquired McAfee with the intent of integrating its security solutions into Intel-manufactured chips.

In 2009, Intel acquired Wind River Systems for ~ $900M.Wind River specialized in making software for chips used in embedded systems such as car electronics. The motive behind this acquisition was to expand Intel’s addressable market beyond PC and servers.

Intel acquired Mashery to boost segment

In April 2013, Intel acquired Mashery, a San Francisco-based startup focused on application programming interface, or API management. Mashery offers a software as a service-based platform that helps businesses craft APIs to attract developers. Its key clients include Best Buy, Comcast, The Coca-Cola Company (KO), and The New York Times. According to Intel, “This acquisition is the next step in building an integrated Intel suite of services – cloud services, digital store fronts, location services, network services and security.”