VARs: Intel-McAfee Deal Is PC Vs. Mac Security Game Changer

Chip giant Intel's $7.68 billion bid to buy security power McAfee has the potential to once and for all solve the perennial spyware, malware and virus issues that have made Apple systems more attractive than PCs, according to solution providers.

"This could be a game changer to solve once and for all the security issues that riddle PCs and make the Mac a more attractive platform for some customers," said Tyler Dikman, president and CEO of CoolTronics, a Tampa Fla. solution provider. "If Intel could come up with a security solution on the Windows-based PC side, this could revive the PC industry and give people a reason to stay on PCs instead of moving to Macs as a way to avoid spyware, malware and virus issues."

Dikman and other solution providers said they see Intel moving aggressively to solve the security issues that affect PCs at the chip level rather than as a separate software subscription offering from the likes of security powers like Symantec and Kaspersky. They said that kind of revolutionary approach to security could significantly reduce the high costs businesses of all sizes are spending to keep PCs and laptops secure.

Intel, for its part, said the acquisition fits in with its strategy to lead with "hardware-enhanced security" to thwart current and future threats.

"This could be a huge game changer for the PC business if Intel does it right and puts security at the chip level," said Bob Venero, the president and CEO of Future Tech Enterprise, a Holbrook, N.Y. VAR 500 power. "That could offload a lot of the IT staffing and manual requirements that IT organizations have put in place to support their end users. I see this as the evolution of where we need to go with security and PC functionality."

Venero estimates that the percentage of the IT budget that midsize businesses are spending on security has skyrocketed from 3 to 5 percent five years ago to about 15 percent today. He estimated that a company with 1,000 PC users has about five people on staff focused solely on PC security issues.

"If you are doing security at the chip level it is much more efficient," said Venero. "Now I can start to reduce the IT staff focused on malware, virus and spyware. Think about how much productivity has been lost in companies because people are surfing the Web. There is no question that productivity has dropped off because of viruses and other security challenges."

Solution providers said that because of the size and scope of the deal Intel could have a hard time getting government approval for the acquisition. They said the deal raises monopoly questions for a company that has grappled with antitrust issues for years.

"You certainly don't want one company calling all the shots in PC industry," said Dikman. "That's a fine line that Intel is going to have to walk. They are about to see how fine that line is. When you start mixing security into the processor you are putting a lot of power in the hands of one company."

Venero said that Symantec is almost certainly going to have to weigh how it changes its business model in the wake of the Intel-McAfee deal. "If Intel is successful it is going to be a major game changer," he said. "The risk of a monopoly is fairly good depending on how they integrate McAfee. If I am Symantec I am going to have to look at how I am going to change my business."

Solution providers said they will not make changes to their business overnight based on the deal. But they said it almost certainly makes McAfee a more attractive channel partner.

Dikman said he hasn't considered McAfee as a security partner in the past. But that could change with Intel leveraging the deal to provide lower cost security options to customers. "Intel could start giving away certain security pieces for free based on buying an Intel processor," he said. "That could be an interesting and enticing way for our customers to buy Intel because it could save them some bucks on their security purchases."

The deal could also have a major impact on PC makers and system builders who offer software subscription bundles on their systems or grapple with the never ending security issues.

Mark Frisch, the president of New England Digital Computers, a $10 million Middleton, Mass. system builder, said the Intel-McAfee union could go a long way toward solving security issues for all customers.

"We are a small company getting hit constantly everyday with blasts for viruses," he said. "This is a huge issue for everyone from home users to large organizations. My first thought is Intel is going to bring security to the board level where it is on a chip so we can get automatic security updates. That would make our customer's lives a lot easier. Suddenly, they wouldn't have to worry constantly about whether their security software and subscriptions are up to date."

Frisch said the acquisition could have a major impact on both security software companies like Symantec and even security appliance makers like SonicWall and Watchguard. He sees Intel beefing up McAfee's security appliance line.

Frisch sees big implications for system builders that will become clearer when Intel maps out its ultimate intentions for McAfee. "Obviously security is a major issue whether you are selling PCs, an appliance or software," he said. "It is going to be interesting to see how this plays out."