logo

Intel spends $27 million on a new 5G push

Key Points
  • Intel has agreed to acquire Smart Edge from Toronto-based Pivot Technology Solutions for $27 million, the company said Tuesday. 
  • Smart Edge helps split up data and store it closer to users to make computing devices respond faster.
  • The software is designed to run on Intel's chips, which the company hopes to sell into equipment for 5G. 
The Intel logo is displayed outside of the Intel headquarters in Santa Clara, Calif.
Justin Sullivan | Getty Images

Intel has agreed to purchase a software business from Toronto-based Pivot Technology Solutions for $27 million, the U.S. chipmaker said on Tuesday.

Intel said it would buy Smart Edge, a software that helps split up data and store it closer to users to make computing devices respond faster.

The software is designed to run on Intel's chips, which are best known as the heart of most personal computers but which the company is aiming to sell into equipment for 5G, the next generation of wireless data networks that is being rolled out starting this year.

According to Pivot's securities filings, Smart Edge did not generate significant revenue in the first six months of 2019, but made a loss of about $1 million before depreciation and amortization. Pivot, which has a market value of about $43 million, was issued a U.S. patent on Smart Edge's technology in July.

Intel, which expects to close the Smart Edge deal in the fourth quarter, views 5G as a chance to expand its sales beyond personal computers and data centers, its two largest business segments.

In 5G networks, more data will be stored on computers scattered near cell towers and other network gear. Storing the data there, a practice called "edge computing" in the industry, is expected to help large files like videos show up more quickly on users' screens than if they were stored in centralized data centers.

"We plan to take full advantage of our combined technologies and teams to accelerate the development of the edge computing market," Dan Rodriguez, a general manager of the network compute division in Intel's data center group, said in a statement.

Intel's shares rose nearly 1% to $52.15 in morning trade, while of Pivot Technology stock gained 4.9% to C$0.70.

VIDEO3:1103:11
5G is a 'huge opportunity' for 2020: Tech Mahindra