Intel, McAfee deal shows increased security in digital age
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Semiconductor chip maker Intel Corp. recently announced that it would acquire security vendor McAfee Inc. in an all-cash offer totaling 7.68 billion U.S. dollars.The move is believed to change the way security is integrated in technology products and IT platforms.
If it goes through, the deal will represent the largest transaction of its kind in security, and has both investors and industry watchers speculating on how it could impact the IT sector, and especially the software security and hardware markets.
"It's an unusual pairing. I don't think anyone would have guessed that Intel would acquire McAfee," said Brenon Daly, a senior mergers and acquisitions analyst with technology-industry analyst firm The 451 Group, in an interview with Xinhua.
Executives at the two companies see this as a way that will help meet growing demand for consumer electronics, especially in the mobile sector. Currently, mobile represents an 850-billion-dollar global market, and is expected to account for 62 percent of total telecommunications sales this year, according to studies conducted earlier this year by global market research firm IDC.
"Connected devices are exploding. As the movement of the new Internet from IP V4 to IP V6 changes, we're going to trillions of devices over time and security is a really important part of that," explained David DeWalt, McAfee's president and CEO, in a video interview released by Intel.
Besides tapping further in the mobile market, this move will allow Intel to more closely cement security within their systems.
"Although much of the analyst discussions with Intel and McAfee have focused on the mobile market, it should be clarified that Intel has stated that the acquisition was not solely a mobile security play. In fact, the company notes that its goal is to bring security further into the guts of systems than ever before," wrote The 451 Group in an analysis of the deal.
While the ultimate goal is to have software security integrated more tightly with hardware, there are no immediate plans to merge Intel's chip prowess with McAfee's security software, leaving analysts like Daly wondering what the immediate objectives are.
"They're not integrating until at least next year. There's no immediate cost synergies or savings ... it's almost like a holding company acquiring a separate company running at a much higher operating margin," Daly said.
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