Intel makes major big data play, partners with Cloudera

March 27, 2014, 8:09 PM UTC

FORTUNE — Intel Corp. (INTC) this afternoon signaled a major shift in its big data strategy, by announcing a multi-faceted partnership with privately-held Cloudera. Key to the deal is an agreement whereby Intel will transition its own distribution of Apache Hadoop to enterprise data centers (a project started several years ago) over to Cloudera distribution. Intel also will make a large investment in privately-held Cloudera, which comes on top of the company’s recent $160 million fundraise from T. Rowe Price, Google Ventures and Michael Dell.

“I think this is an unprecedented type of strategic partnership in our category,” says Tom Reilly, Cloudera CEO and former general manager of enterprise security at Hewlett-Packard (HPQ). “You’re taking the clear market leader in data center silicon, and combining it with the emerging leader in data center management. Our commitment is to make sure Hadoop is optimized and runs best on Intel’s architecture, while they’re commitment is to help us expand, including into some markets where they’re strong and we haven’t even touched yet.”

Diane Bryant, senior VP and general manager for Intel’s data center group, says that Intel already has shown that it can improve data center performance 10x by optimizing for Hadoop, and that this agreement will help the company scale faster (and, arguably, further improve performance via additional optimization). She also acknowledges that Intel reported “soft” fourth-quarter results from its enterprise data center business, but said that the Cloudera partnership is not a reflection of those results.

“We believe that big data deployments will be the growth driver for enterprise IT,” Bryant explains. “It is critical that Intel enables the entire solutions stack, and that those solutions scale.”

Neither Reilly nor Bryant would disclose the specific size of Intel Capital’s investment, except to say that “rumors are understated… this is unprecedented.” What we do know, however, is that Intel has invested more than either Google Ventures or Michael Dell, and that it did not do so at the same terms as the $160 million round (which was done at around a $1.8 billion valuation). Expect further details next week, including the identity of which Intel executive will join the Cloudera board of directors.

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