Intel's Shiva reincarnated

Intel has sold off its Network Systems Group, a communications division formed from its acquisition of Shiva Corporation. Simple Access, a Newton, Mass.-based network-security company, purchased the unit and has renamed itself Shiva. Intel Capital will hold a stake in the newly named company.

The original Shiva, bought by Intel in 1998, was one of the chip giant's first purchases in a massive three-year buying spree. Shiva was a leader in virtual private networks, software that lets companies create secure channels on public networks such as the Internet, giving them instant wide-area networks without the deep infrastructure costs.

During the next three years, Intel spent over $11 billion on more than 35 companies, primarily in networking and communications, to expand its revenue sources beyond the PC. Many of these efforts, however, foundered and were subsequently terminated.

Intel bought Shiva for $185 million. Financial terms of the sale to Simple Access were not disclosed. The new Shiva will integrate the virtual private networking software into its firewall, broadband and secure socket layer (SSL) software.

"Shiva pioneered the remote access revolution and its evolution toward virtual private networking," said Pierre McMaster, CEO of Shiva, in a statement. "We will build on this technical and award-winning product leadership with secure, easy to use and deploy solutions that allow businesses to securely leverage the Internet to increase revenues and lower operating costs."

Despite the sale of Shiva, Intel continues to invest in the communications area. The chipmaker recently announced it will invest $150 million in companies working on products that have to do with the emerging Wi-Fi wireless-networking technology.