Intel's McAfee Deal Stirs Mixed Feelings - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Software // Information Management
03:29 PM
Rajan Chandras
Rajan Chandras

Intel's McAfee Deal Stirs Mixed Feelings

There's a lot that Intel can accomplish by acquiring McAfee, but it's hardly what we might categorize as a "Well, duh!" move... This merger falls into the "strange bedfellows" category.

There's a lot that Intel can accomplish by acquiring McAfee... but it's hardly what we might categorize as a "Well, duh!" move.

Intel's Paul Otellini states what seems the purported move behind acquiring McAfee (and the sound byte of the day): "In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences."Sure... but this is obviously from a limited (hardware) perspective -- you'd hardly imagine software vendors taking about "energy-efficient performance." As Intel continues to spread its wings beyond x86 and like architectures, it must inevitably look to the future. Moving security to an inbuilt component rather than an add-on is attractive from all perspectives, as noted by Intel senior VP Renee James: "Hardware-enhanced security will lead to breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow".

The industry needs a new approach that combines software, hardware and services to meet tomorrow's needs, says Intel.

True enough. Yet, this merger falls into the "strange bedfellows" category. The last time two big names in hardware and security came together was when Symantec acquired Veritas in 2004 (a merger in the other direction from Intel-McAfee). I ran into a Symantec salesperson at a conference stall at that time, and questioned him on what possible rationale there could be for Symantec to spoil a Veritas party that was going on swimmingly. He didn't have any good answer -- and to be fair to him, neither was it expected of him. The fact is, there really was no good answer.

It's not quite the same thing this time. For one, things are different today. Also, companies like Intel and Cisco have avowedly moved past their original core competencies in search of water (to survive), gold (to thrive) or both. For Intel to seek deeper insight and market thrust into embedded security (e.g. mobile devices) and network security is a logical extension.

Yet, analysts seem less than enthused at this pricey means of acquiring the expertise. On a conference call with Intel executives, it seems, UBS analyst Uche Orji questioned Intel's rationale for the deal, wondering why Intel needed this expensive purchase; why couldn't Intel simply collaborate with McAfee? Ashok Kumar, a technology analyst with Rodman & Renshaw, also sees this as an expensive way for Intel to acquire domain expertise.

Chris Hickey, an analyst at Atlantic Equities, see this coming "slightly out of left field. Nobody could have seen this coming." Perhaps, he adds, this is an opportunity for Intel to cross-sell McAfee's security software to its clients.

That would be disturbing -- something like a grocery store beginning to stock OTC medicines. Hopefully Intel has something deeper in mind -- and at stake -- than merely cross-selling products from an established but unrelated vendor.

After all, as McAfee now announces on its Web site, the objective of the merger is grand: "To provide solutions and services across a heterogeneous world of connected devices... to tackle the next generation of cybercriminal and cyberterrorist threats."

Right out of the next Star Trek movie.There's a lot that Intel can accomplish by acquiring McAfee, but it's hardly what we might categorize as a "Well, duh!" move... This merger falls into the "strange bedfellows" category.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
10 Top Cloud Computing Startups
Cynthia Harvey, Freelance Journalist, InformationWeek,  8/3/2020
Adding Fuel to the MSP vs. In-house IT Debate
Andrew Froehlich, President & Lead Network Architect, West Gate Networks,  8/6/2020
How Enterprises Can Adopt Video Game Cloud Strategy
Joao-Pierre S. Ruth, Senior Writer,  7/28/2020
White Papers
Register for InformationWeek Newsletters
Current Issue
Enterprise Automation: Do More with Less
In this IT Trend Report, we highlight the benefits of automation and the various tools as enterprises navigate turbulent times, try to do more with less, keep their operations running, and stay on track with digital modernizations.
Flash Poll