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What impact will Intel's acquisition of McAfee have on the security landscape?
A debate is ensuing about the strategy behind Intel's $7.7 billion purchase of McAfee and its implications. While potentially risky for Intel, the deal holds enormous potential for improving hardware security, especially in the mobile market. Some have gone as far as to call the acquisition a game-changer. What do you think?
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3 Answers
I have little hope that there is any potential here for Intel. Security as represented by the big vendors, especially AV, is the most mature part of technology. So no game changing is possible. If there were an opportunity to do new stuff with silicon and AV Intel would already be changing the world by working with the 28 or so AV vendors.
If the deal *does* go through, and don't forget that Intel's stockholders have to approve this (McAfee's will approve it of course!), it will change the security landscape dramatically. McAfee will be taken off the table for at least a year as they figure out what their overall strategy is going to be. The network security vendors will be able to take advantage of that as they target McAfee's Intruvert and Secure Computing customers. The other AV vendors (Sophos, Kaspersky, Eset, AVG, Panda, Avira, BitDefender, Norman, Gecad, GriSoft, etc.) will take advantage of this as well.
Intel seems to have missed a major inflection point (Andy Groves where are you?) Network security vendors all have to make a technology roadmap decision every few months or so: continue to develop security processing hardware or move to Intel Multi-core processors. With the acquisition of a major competitor they have one more reason to go down the ASIC/FPGA/custom chip route. I am shocked that Intel was not aware of this.
If the deal goes through there will be a resurgence in security funding from VCs. That's a good thing. Valuations should go up too but most acquirers are savvier than Intel has proved to be and will back away from such premiums.
I think this is an interesting acquisition from a strategic perspective - the vast majority of intel's customers are businesses - McAfee will bring them direct customer relationships. In the near term, I think this is much more important than any of the technologies they are acquiring given that the current technology portfolio is driven by the operating systems and not the underlying hardware.
In the longer term, Intel has worked with security vendors in the past to try move security "below" the operating system, if they can succeed - that would change the security landscape.
Intel is also fond of producing reference platforms for OEMs to build (think ViiV), one could envision them building a Secure reference platform and going to market with that.
On the downside, Intel is now a competitor with Microsoft - that should be interesting to watch
Kate, I agree with much that Richard has stated.
Here are the negatives that I see with the deal:
-- Too expensive. McAfee is a premiere *name* but not a premiere product. Check around and see how many IT managers are looking to get away from their bloated and cumbersome antimalware products. Intel is paying too much.
-- Competition. Intel has just created competition with some of the very people that it could have collaborated with and sold much silicon to. This makes AMD much more viable as a partner to security companies, not to mention other chip vendors such as Tilera.
-- Integration. Intel doesn't do so hot with software companies, and I don't see why they would with McAfee. If they wanted to do security-on-silicon, then they could have picked a smaller player, avoiding the first two problems altogether. And it if was IP they were after, then they could have done one of the many cross-licensing deals they are so fond of. Not to the tune of $7B+
I don't see what game Intel has changed -- certainly not one that anyone else is playing. It will be interesting to see if other acquisitions take place, indicating that other CEOs feel that Intel has gotten an advantage on them -OR- if they stand pat, or make deals in the way of partnerships, which indicate that they'll wait to see how Intel can pull anything off. There is no early mover advantage here, so waiting is more prudent.
Furthermore, none of these software/services companies is all that useful once they cross a certain size, anyway. They're too slow to move against upcoming threats (look at how long it took all the "big" security players to combine AV and antispyware), and they get too focused on protecting existing margins rather than being truly innovative and groundbreaking.
We need mergers and acquisitions that make sense for more people than just shareholders, senior management and lawyers (all in the short-term).
-ASB: http://xeesm.com/AndrewBaker
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