There's A New $2 Billion Security Company In Town: How Will McAfee Shake Up The Competitive Landscape?


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There's a new $2 billion security company on the market, but how will that affect competition in security market landscape overall?

"I think it's just going to become increasingly competitive," said Doug Cahill, senior analyst for cybersecurity at Enterprise Strategy Group.

"We think there is going to be a settling of those from the startup pack who will emerge as market leaders … and while the established brands may have been more vulnerable in the past, they have now updated their offerings," he said.

[Related: Intel Security Re-Emerges As McAfee, A $2 Billion Security Company]

McAfee Tuesday closed on its split from Intel, which had acquired the company in 2010 for $7.7 billion. The split, first announced in September, involves the sale of a 51 percent stake of the McAfee to TPG Capital. The deal is worth $4.2 billion, including $3.1 billion in cash to Intel and a $1.1 billion equity investment by TPG.

McAfee, however, isn't the only legacy security vendor looking to reinvent itself for a new age of security. Symantec also has come out with guns blazing, spinning off its Veritas storage business last year, unveiling multiple multibillion-dollar acquisitions, and rolling out new products. Those two companies, along with Trend Micro, are also facing increased pressure from next-generation endpoint security companies, including Cylance and Crowdstrike.

"I feel like McAfee, Symantec and Trend Micro owned the endpoint security space forever, and then some newbies came along. … Now all three of them have shifted gears and will aggressively go after that," said Andy Welsh, vice president of product management at Denver-based solution provider Optiv Security. "It's a very crowded space."

However, Andrew Nowinski, senior research analyst at Piper Jaffray, said he doesn't think the spinout of McAfee will drastically affect the direction or strategy of the company's main competitors, most notably Symantec.

"With McAfee getting spun out, they are certainly going to still be focused on the endpoint market. I don't think that changes anything," Nowinski said.

McAfee is one of five security vendors ranked in the TBR Security Market Forecast as the largest players in the market, alongside Symantec, Trend Micro, Kaspersky Lab and Sophos. Those vendors combined accounted for 54.7 percent of the B2B endpoint security market in 2016. However, Jane Wright, principal analyst for security at the research firm, said in an email to CRN that TBR expects that increasing competition from upstarts in the market is expected to drop the overall share of the top five security vendors to 53.8 percent by 2021.

How that competitive landscape will shake out will depend, in part, on how McAfee executes as a private company, said Jeremy Samide, CEO of North Olmsted, Ohio-based security solution provider Stealthcare. That includes execution around the company brand, technology innovation, marketing and realigning with channel partners, he said.


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