SAN DIEGO — Intel Corp. has agreed to sell most of the assets of its Trillium Digital Systems Inc. subsidiary to Continuous Computing Corp. Though terms were not disclosed, one source said Intel sold the assets at fire sale prices.
"If the prices I heard are accurate, Intel seems to be offloading every bit of business not considered absolutely core at prices that are barely above a write-off of assets," said the source formerly with Trillium, who spoke on condition of anonymity.
Intel paid $300 million for Trillium in August 2000. In 2002 it sold its Ziatech board business to Performance Technology Inc. for a fraction of its purchase price, and its Shiva remote-access business to Simple Access Inc.
Continuous Computing chief executive officer Ken Kalb said he contacted Intel to check on its interest in selling Trillium as soon as he had learned of its Ziatech and Shiva sales, though he said Continuous had never used a Trillium stack.
Kalb would not comment on the financial terms of the deal or the source's statement, but said Intel would have had difficulty continuing to sell Trillium's software without making the company a profit and loss center, adding that this may have driven Intel's decision to sell most of the Trillium operation.
Continuous Computing will acquire the bulk of Trillium's portable software environment for higher-layer protocol stacks in such realms as H.323, Media Gateway Control Protocol, Signaling System 7, and Session Initiation Protocol (SIP). Continuous provides high-availability boards and bundled subsystems in such form factors as Compact PCI and PICMG to large OEMs such as Alcatel, Ericsson, Cisco and Tellabs.
Continuous has pledged to maintain the Trillium business model of directly licensing source code and bundled middleware. Continuous will hire some engineers and employees from Trillium's sales and support organization in Los Angeles, where Trillium is based. Only a portion of Trillium's hardware-specific software products and professional services remaining with Intel.
Although Continuous could be a direct competitor to many OEMs that would use the Trillium software, Kalb said he had spoken with a competitor in the ATM market who indicated that his company would have no problem licensing Trillium code from Continuous.
The Trillium operation will be folded into Continuous Computing but the Trillium name will live on as a product brand within the Continuous portfolio, Kalb said. Trillium employees based in Los Angeles will move to Continuous' headquarters in San Diego.
