Intel's McAfee Acquisition: Waiting For Clarity

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As the dust settles on Intel's massive acquisition of McAfee, it's no more clear than it was in August as to why the giant chip maker paid a 60 percent premium at $7.68 billion to make security as their next big focus.

While McAfee has maintained that, at least for a while, it will operate as a standalone security entity, analysts and pundits believe otherwise, contending that it is more likely McAfee's security offerings will be used to embed technology into the chip set.

Thus far, both Intel and McAfee have been tight-lipped about what role security will eventually play for the world's biggest chip maker and experts have speculated the purchase could have been driven by McAfee's brand awareness, its global reach and its strategic relationships with companies like Verizon and Adobe as well as the government sector.

If anything, experts agree that the marriage of the processor maker and the second largest security company in the world has major implications, both for the future of McAfee and the security industry in general.

For McAfee itself, the merger shifts its focus and transforms the company from a standalone product vendor to a parts producer for the chip manufacturer.

"It's not wildly clear as to the implications," said Patrick Sweeney, vice president of product management for SonicWall. "It's almost like a devolution. McAfee ceases to become the arms supplier and devolved into a manufacturing supplier to the arms supplier."

That transformation to a parts supplier could eventually take McAfee out of the running as a major security competitor and instead make them part of the food chain that will be subsequently consumed by other security vendors.

"Security to the silicon -- that has a lot of implications. It makes most security vendors probably in the position to utilize some of that silicon, instead of competing with McAfee," Sweeney said.

Executives from security company Unisys, one of McAfee's existing security partners, said that the merger represented a significant change of paradigm and a turning point for the security industry in general.

Perhaps one of the biggest changes would be the implementation of security directly into the chip, which could be put into 'just about anything," said Rene Head, Unisys global engagement manager for managed security services.

In particular, the security-enhanced chip could increase Intel's avenue for protecting the mobile space, particularly smartphones, as more consumer devices are used in the workplace, Head added.

A recent Gartner study projected that more mobile phones will be accessing the Internet than PCs -- a statistic addressed by McAfee's recent acquisition of mobile security company Trust Digital.

Meanwhile, Intel is far from the only major IT vendor to have acquired a security company, Head added. Indeed, over the next several years, security could become a more integrated part of IT infrastructure in light of IBM's acquisition of BigFix and HP's purchase of Fortify as well as others others. "The endpoint has become weaker to support the demand of business goals," Head said. "Intel could fill that gap completely."


Next: The Changing Concept Of Security

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