Making Sense of the Intel McAfee Purchase

Today's Best Tech Deals

Picked by PCWorld's Editors

Top Deals On Great Products

Picked by Techconnect's Editors

Intel and McAfee shocked the tech world this morning with the announcement that Intel is acquiring McAfee for 7.7 billion dollars. The initial reaction from analysts and industry experts is confusion--or maybe cautious skepticism--as the tech world tries to understand how a company synonymous with processors and computer chip technology will make use of a major security software and services organization.

I spoke with IT-Harvest analyst Richard Stiennon for some insight on the blockbuster news. With details still somewhat sketchy, Stiennon postulated that it isn't about antivirus software. "You're paying $7 billion for an AV company which is crazy because there are 80 of them and they all do the same thing and you could buy one for $50 million."

Stiennon also offered some speculation that the McAfee acquisition might enable Intel to gain better access to lucrative government contracts. McAfee has a solid foothold in government desktop security that could open some doors.

Forrester analyst Jon Kindervag's early reaction is less than optimistic. In 2000 Intel bought a solid VPN company--Shiva--and within a few years it basically crumbled into oblivion because VPN technology is not Intel's core competency.

The purchase of McAfee, and the move into enterprise and consumer security is similarly outside of Intel's traditional comfort zone. Kindervag said "I would love to be wrong, but I think we may all look back five years from now and say 'Wow. That was a big mistake.'"

McAfee's CEO Dave DeWalt discussed why the merging of McAfee and Intel makes sense. "The number of connected devices is expected to grow from 1 billion to 50 billion by 2020, according to industry estimates. This explosive growth of Internet and IP-enabled devices is reshaping communication, collaboration and commerce opportunities for individuals and organizations around the world."

DeWalt elaborates "We are joining forces to tackle this next generation cybersecurity issue, which impacts everyone and anything connecting to the Internet. Security will be a third pillar in Intel's strategy, next to power efficient performance and Internet connectivity. By bringing McAfee's security DNA to Intel, we can offer better solutions and products to the market. By next year, we will introduce new security offerings as a result of our collaboration."

George Kurtz, Global CTO of McAfee, explains in a blog post "While you may ask "Why?" - It makes perfect sense to me. Given the current challenges in dealing with the proliferation of virulent malware, bringing software closer to silicon will provide a real advantage for consumers and businesses. Beating back the tide of malware proliferation by changing the game on the bad guys is an exciting proposition."

At face value, it seems like an "oil and water" sort of purchase--like the ill-fated acquisition of Skype by eBay, but perhaps there is some grand plan or spark of genius that we will understand more fully as the dust settles and the operations of McAfee and Intel become integrated. It could be a brilliant move, or a huge mistake, and only time will tell.

Note: When you purchase something after clicking links in our articles, we may earn a small commission. Read our affiliate link policy for more details.
Shop Tech Products at Amazon