Q&A: McAfee President and CEO Dave Dewalt

Page 1 of 2

CRN sat down with McAfee President and CEO Dave Dewalt at Interop Las Vegas 2008, where we heard his thoughts on the economy, McAfee's growth and direction of the company's channel program.

You've been at McAfee a year. What have been some of the successes? How has the company changed in the last 12 months?

The biggest is that we've grown the company. An area where McAfee was growing in the mid single digits, we're now growing at three, four, five times that. A lot of that has to do with having really good products—the company has some great products. We also have a lot of the compliance issues behind the company, statements and things that cost the company a bit of money. So a lot of that's behind us and we've been able to open up a new chapter for the company. It's a growth year. We've brought new leadership into the company but also augmented the people who were already at the top.

But it's changed a lot. I've enjoyed the security market tremendously. There's a little bit of the passion for the noble cause. Every day our engineers and our team are all trying to help these corporations. So it's a situation where you feel good because you help people with a problem. That's been sort of the eye opener to me. We actually really do have a company that helps catch bad guys. How many people can say that? We do.

What do you attribute that explosive growth to? And why was it in the single digits before?

A couple of factors. Certainly we've had a lot of reliance on really one product—antivirus. So we have a great product, virus scan enterprise, virus scan. Our TOP for consumer was largely antivirus. We've got a whole suite of products now that are best of breed, but in a suite. Some of those products include spyware. They include host intrusion and personal firewall. They also include network access control, now data loss prevention and encryption products all in one suite. That makes it more economic for customers to buy that suite than buying one product at a time. We've found that with the climate we're in, from an economy point of view, as well as the compliance atmosphere that people are in, we've got a good product for people to purchase and that's helped fuel our growth.

Probably another big one is that the emerging markets are really helping us. We get about 50 percent of our revenue internationally, and we get a lot of growth there. We've been growing consistently very high in the European, Latin American and Asian markets. And that continues to be a big driving force.

McAfee's focus seems to be moving toward combining products into an all-in-one suite. Do you see this as a trend? And if so, why?

I do. A lot of it is the hangover we've had from the last five years, where the prevailing wisdom was to put in as many point products as you could from as many vendors as you could because the concept was there that by putting in more, you've got more defenses. Somebody's got to find the problem if it's multiple vendors.

The reality now is we share research behind the scenes, even with competition. We've got consortiums to share research. If Symantec finds an outbreak and a problem, we share it and vice versa. These are the ways that have now have equaled the playing field. Companies will share research and it creates an environment where one product versus another isn't necessarily higher protection.

Also people are much more conscious of cost now. It's just the reality of where we've been for the last six months. Companies are looking for ways to consolidate their costs while keeping high protection. It becomes a nice driver for McAfee and probably for other big companies too. Whenever you're in a more frugal time economically, it plays more to a suite and it plays more to a big company needs.

Do you see the enterprise embracing security suites in the same way that the mid-tier has?

Believe it or not, it's across all the segments. And that's what's got us growing much bigger than we were. We have developed a product family we call TOPS, it's Total Protection Suite. But the same core sets of products we've built for consumers, TOPS for consumer, goes TOPS for small business, TOPS for enterprise and TOPS for enterprise advance. Essentially the core is layered on with more products for a sophisticated company. But we have a suite from consumer on up.

How do you see the failing economy affecting McAfee. Do you see your customers cutting back on security spending?

No I don't. We've had accelerated growth the last three quarters, and so we did not see any downturn. If anything, we actually saw a pickup in security spending. I certainly believe that we're going to have some changes in the economic landscape as it relates to IT. But security is becoming a bigger and bigger piece of the IT spend. That's been the trend for several years now, where security was once a couple of percentage points and now it's gone much wider and continues to be important. If you ask the financial services industry to stop spending on security, their goal is protect people's money. It's not like they can stop spending on security. Spending and security are a very important need for every company. We're pretty recessionary proof. We're not immune entirely, but we're at the top of the list for people to spend.

What new emerging threats out there that users should be wary of?

One of the threats that have continued to grow, which is going to grow even bigger, is data loss protection. There is absolutely no doubt that companies are very concerned about losing their data. And losing it can be accidental, as in "I lost my mobile phone or my laptop" but even if I lost my mobile phone and I can't find it for 24 hours, I have to report it if I know that there's consumer data on that laptop or mobile phone. When I have to report it, it could be sensationalized as data loss, consumers have to be notified, and PCI compliance forces them into a notification and a breach.

That scares a lot of consumers from continuing to buy from the brand they trust. So people are really worried about that so they're deploying things like encryption and data loss prevention. Then of course off shore development and outsource manufacturing are driving people to worry about intellectual property. That's a big trend. We've only seen the beginning of that as it relates to security.

Then the other ones that I think are out there are mobile computing and virtualization threats. How many mobile phones did we ship this year? A billion plus. How many new deployments of virtualization will we see? VMWare and other companies in that space have grown dramatically. These all require security features. It's just a whole new device and a whole new operating system to worry about.

How do you plan on diversifying your portfolio to combat these threats?

First of all, we're focused on security only. I think that's been a very strong strategy for us. We've seen some of our competition diversify out of security, and they've had their challenges as a result of that. We focus on security. We want to be the largest security vendor in the marketplace and we're not going to get outside of that market.

Having said that, you can't do everything, even inside security. But we have three big segments of our business. We're focusing on endpoint security as defined by laptop PCs, mobile phones, everything at the endpoint. We're focused on the network, however the network is very tangential business to our endpoint because same types of threats and trends that happen at the endpoint, happen at the network. Virus scanning, malware detection, intrusion prevention and detection—very similar parallels there. So it's very easy for us to do the same thing in both of those spaces.

A third business is what we call risk and compliance—this one covers all aspects of security, vulnerability scanning, vulnerability management and remediation management. This is patch management. We've acquired a few companies to focus in on that. We've decided to continue to acquire and build products and continue to grow.

Next: Acquistions

1 | 2 | Next >>

Tweet

   

More Security