Intel Berkeley
Corporate Venturing
Q1.Why did Intel Capital invest in Berkeley Networks? Why did Berkeley Network invite the investment?
Intel instituted a venture capital division in its company as a means to provide support to the industry. Intel is the world's largest manufacture of microprocessors. However, the company is also heavily dependent on other players in the industry who produce some of Intel's supplies or manufacture other components that work alongside Intel's processors. The interconnectedness of this industry has been referred to as a "market eco-system" because the success or failure of another company could have implications for the entire industry.
Although Intel commonly invests in other technology companies, it does not do so randomly. Intel targets their investments in other companies that do or could support Intel strategic interests. For example, if another company was manufacturing a product that was made to work with one of Intel's chips and had potential but was having trouble accessing capital to pursue their project, then Intel could step in and capitalize the company in order to support this company in their development. However, the ultimate goal would be for the investment to help Intel profit from this arrangement at some point in the future. Profitability in this arrangement could be gained both from the investment in the company as well as the benefits that would accrue to the parent company.
Intel invested in Berkley Networks for just this reason. Berkley Networks produced electronic switches that were embedded with Microsoft's Windows NT technology. The technology utilized a horizontal, rather than vertical, open architecture that was designed...
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