California-based software giants Intel Corp. and Network Appliances Inc. said today that they have entered into seven-year, $1 billion cross-purchasing agreement.
Under the terms of the pact, Intel will buy storage devices for use in its data center operations division from Network Appliances, which, in turn, will buy its chips and other components from its new partner.
The agreement also includes patent sharing, technology development and joint standards collaboration, company officials said.
Most analysts theorized that Network Appliance had the most to gain from the new arrangement
“Data centers are just a small part of Intel's business and a pretty unsuccessful part,” said Jeremy Lopez, an analyst at Morningstar. “It doesn't seem like a major deal for them.”
Will Swope, Intel's vice president and general manager of Architecture Solutions Enabling Group, seemed excited by it.
“This agreement significantly expands our relationship with Network Appliance,” he said. “And as the build out of the Internet continues it will benefit both companies.”
Intel is the world's largest maker of chips, while Network Appliance pioneered the concept “network appliance.”