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Intel to buy security software startup for $20M

The chip giant plans to acquire Sensory Networks, which creates pattern matching and acceleration software.

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Intel is expanding beyond its core PC chip business. Josh Lowensohn/CNET
Intel has agreed to buy a security software startup for $20 million, boosting its capabilities outside of its core processor business.

The Santa Clara, Calif., chip giant has reached a deal to acquire Sensory Networks, spokesmen from the two companies confirmed to CNET on Tuesday. Both declined to provide deal terms, but Intel said revenue contributions from the acquisition are not material to the company. The Sydney Morning Herald, which earlier reported the news, said Intel will pay about $20 million for the startup.

Sensory Networks, founded in 2003, creates "pattern matching and acceleration software," which is used in firewalls and to detect spam and viruses.

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"We're very pleased with the deal and to us it culminates almost [five] years of very hard work that started with the restructure of Sensory Networks in 2009 under Sab Gosal (our CEO), myself (as CTO) and with a very small team of employees ([three] engineers in the Sydney office)," Sensory Networks Chief Technology Officer Geoff Langdale told CNET via e-mail. "We've shown that a tiny team can yield world-class results and sell technology to Tier 1 network providers."

Sensory Networks isn't Intel's first software acquisition, and it's nowhere near its largest. The company in 2009 paid $884 million for Wind River Systems, a software firm that helps run cellphones and other embedded systems. And it reached a $7.68 billion deal for security software maker McAfee three years ago. At the time of the latter purchase, Intel said that combining its hardware with McAfee software would better prevent security breaches and malicious software, rather than simply detect and respond to infections.

Expanding beyond its core PC chip business is key for Intel's future growth. Computer sales have slowed in favor of tablets and smartphones, and Intel has struggled to gain inroads in the mobile market. Software is one area where Intel has built its portfolio.

Sensory Networks was founded by Australian technology entrepreneurs in 2003, and it currently has only five employees. The company moved its headquarters to Mountain View, Calif., but maintains an R&D office in Sydney. Sensory Networks has partnered with Intel in the past, including working with the Wind River business on various projects, and it also has worked with other chipmakers, such as Cavium.

Updated at 8:15 a.m. PT with comment from Intel and Sensory Networks.