Intel, McAfee Deal: Quick Takeaways and Potential Ramifications
While no one seems to have expected this particular combination of companies – Intel, a dominant force in the chip space, particularly processors, and McAfee, a major player in the security space – once you start to think about the $7.68 billion deal and what McAfee could offer Intel, it starts to make a lot of sense.
"With the rapid expansion of growth across a vast array of Internet-connected devices, more and more of the elements of our lives have moved online," said Paul Otellini, Intel president and CEO, in a prepared statement. "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.
"The addition of McAfee products and technologies into the Intel computing portfolio brings us incredibly talented people with a track record of delivering security innovations, products and services that the industry and consumers trust to make connecting to the Internet safer and more secure," Otellini added.
Here’s a quick look at some potential strategic directions the deal has enabled.
- Intel’s investment in ProV technology that enables remote management of Intel architecture-based PCs and other devices could offer a whole new level of functionality with the addition of embedded security software. And in turn, for MSPs who use Intel ProV to help service their customer accounts, it could offer an upsell opportunity, particularly in an era when malware is running rampant.
- PCs are no longer the dominant user platform. Smartphones are. With smartphone sales outpacing PC sales, Intel has recognized that it’s important to win in the mobile space. But it is fighting an uphill battle as many handset makers typically choose ARM processors for their devices. An Intel processor with embedded security could give Intel a leg up in that space.
- And with security embedded in the chip, Intel’s move ups the ante for Intel’s x86 chip competitor AMD and also Nvidia. These chip makers may feel compelled to respond in some way to Intel’s new competitive edge, if not through acquisitions then through partnerships with security companies.
- The consumerization of IT is an acknowledged trend among industry watchers as so many users bring in their own smartphones and other devices to be integrated with the corporate network. But these devices often don’t meet corporate security requirements. In it’s announcement of the McAfee acquisition, Intel said: "Today’s security approach does not fully address the billions of new Internet-ready devices connecting, including mobile and wireless devices, TVs, cars, medical devices and ATM machines as well as the accompanying surge in cyber threats. Providing protection to a diverse online world requires a fundamentally new approach involving software, hardware and services."
- Intel is moving into new realms as the processor technology game changes. Processor makers’ efforts to gain performance by turning up the clock speed ended a few years ago when the heat became too much. And as many have predicted, Moore’s Law – which lets chip makers double the number of transistors they put in the same amount of space, enabling ever better performance for the same price -- is actually about to come to an end soon because transistors are currently so small, you’d have to split an atom to make them any smaller. Former Intel CEO Andy Grove has noted that Intel’s entire manufacturing business model was built on the revenues and margins enabled by Moore’s Law. And now that that model is coming to an end, it’s time to find something else.