Despite some unsuccessful past attempts, Intel is not giving up on the software world. Today (Thursday) the company announced the acquisition of the Israeli start-up Granolite, which will join the dedicated advanced software and technology division, which was established last year. The amount of the purchase deal was not provided by Intel but is estimated at $ 650 million.
Granolite, founded by Assaf Ezra and Tal Sage, Talpiot graduates and 8200, develops software that helps companies reduce cloud bills by optimizing the use of computing resources, without rewriting the code.
Granolite was selected last December to Globes’ list of promising start-ups. The company was founded in 2018, has since raised $ 50 million from investors such as Red Dot Capital Partners, Insight Partners, TLV Partners and Arrow Ventures, and currently employs about 125 people. Employees are expected to benefit from the deal as well with about $ 100 million of the amount to be allocated for them.
In addition, given Intel’s past experience in acquiring software companies in the software world, which has sometimes run into difficulties, Granolite is expected to remain a single organization within the software division, which could allow its spin-off in the future, as Intel is currently doing with Mobilai.
Intel is known as a hardware giant, but over the years it has made attempts to enter the software worlds, which have not always been successful. One case that did not succeed is the acquisition of the Israeli company Replay, which dealt in the field of 360-degree photography at sporting events. The startup acquired in 2016 became the Intel Sports division, which has since closed. The acquisition of the information security company McAfee, which Intel sold a few years later, is also not considered a success.
Enjoy Intel’s customer base
Ezra and Sage served together and after their release in the summer of 2017 considered setting up a cyber startup as requested by 8200 graduates. But from the conversations Ezra and Sage mostly discovered the inefficiency with which organizations utilize computing resources, and they decided to focus on the issue. This is how Granolite came about in 2018.
After a year and a half of work, in March 2020, Granolite launched the product – a software agent that sits on the company’s servers in the public cloud or in the organization itself and manages the order of operations, to improve efficiency and reduce costs. Normally the order of operations that the server will perform is determined by the operating system, but it operates generically without analyzing the unique work patterns of the specific organization.
Granulite software provides faster response time to applications alongside less computing resource consumption. Granolite reports a cost reduction of up to 60% in the cloud computing account without investment in development. In December, Ezra told Globes that the company’s revenues stand at millions of dollars.
One of Granolite’s difficulties stemmed from the fact that its solution requires the installation of a software agent on the organization’s servers, which requires great trust on the part of customers. It is not easy for a start-up to gain such trust from huge customers and this is where Intel came into the picture. Intel’s relationship with Granolite began in late 2019, when Granolite was part of the first cycle of Intel Ignite, Intel’s acceleration program that helps the success of early-stage companies. Since then Intel has helped Granolite connect customers.
Granolite is expected to continue working with external customers even after the acquisition and enjoy Intel’s reputation and customer base, which will make it easier for it to expand its operations. In fact, Granolite will continue to support servers working on all types of architectures, not only Intel but also AMD and ARM, which reflects the open approach that CEO Pat Glasinger is trying to adopt for the company. Her, which has characterized her in the past.
“Together with Intel, we believe we can help customers lower costs and improve performance in a very significant way,” said Assaf Ezra, founder and CEO of Granolite. And expand the development along with 19,000 Intel software engineers. “
The announcement further states that the acquisition is expected to close in the second quarter of the year, and is subject to standard closing conditions.