Home / Software & Service News / Why an Intel/McAfee split makes a lot of sense

Why an Intel/McAfee split makes a lot of sense

intel mcafee

Rumors have been flying lately that Intel will be “separating” McAfee, which it acquired in 2011. While it’s never safe to put too much faith into rumors until all the facts are known, in this case, the rumors make a lot of sense. Here is why it’s likely to happen.

Intel bought McAfee at a time when PC sales were still healthy and increasing at a good rate. McAfee had a strong presence in consumer anti-virus software but an even bigger play in the management and protection of enterprise PCs, a critical market for Intel. So the acquisition made a lot of sense as it helped Intel differentiate itself in a competitive marketplace, and it added accretive revenues. It provided Intel with a software revenue stream the company hoped would smooth out the ups and downs of the semiconductor business.

At the time, I expected a lot of good synergies to result from this combination of companies. Unfortunately, many of the expected synergies between McAfee and Intel never fully materialized. For the most part, McAfee remained an independent operation, and the expected benefits of merging some of the protection products into Intel hardware at the component level didn’t happen.

There were a few small combinations that emerged but the pair never pulled off a bigger play, mainly because there was insufficient focus from management on making it happen. As time passed after the acquisition, it seemed that the separation between McAfee and Intel grew instead of shrinking. And 2-3 years ago, it was clear that McAfee, even as it changed its name to Intel Security, was primarily a standalone operation and not a fully integrated Intel technology play.

Of course, changing market dynamics haven’t helped. The PC market is currently troubled, with shrinking unit sales and an extended refresh cycle. That limits any benefits to Intel, as McAfee (as well as its competitors) struggle to get back to the growth of previous years. And with all of the uptake of mobile devices, most of which are not protected at all, there is minimal sales potential for McAfee in this growth market. This lowers any possible upside in volumes to make up for the reduction in PC sales. Most mobile device security is provided by an entirely new breed of player, and McAfee never sufficiently made the transition. Although it did make a few acquisitions along the way, none materialized into anything significant, due primarily to lack of focus on this emerging market by McAfee management.

Times have changed for Intel. It has decided to “get back to basics,” which is clearly indicated by its recent management and strategy shakeups and is a wise choice. Intel needs to focus on newer growth markets that revolve around IoT, wireless communications, and cloud-based services. McAfee has never been a strong fit in the server market, and it doesn’t have any significant play in the wireless communications space. It will take some time to establish any kind of play in IoT if it is even able to make the transition (and given its history in mobile devices, I’m not confident it can do any better in IoT). But, being independent of Intel may actually help McAfee refocus some of its energy on upcoming growth markets, making it ultimately more competitive than it would be as part of Intel. And it may energize McAfee management as well to take the steps needed for long term success, including potential new strategic partnerships not currently available to it.

For its part, Intel has been focusing on building more security and management capability directly into its chips – a necessary component of any push to the IoT and cloud world. Intel really doesn’t need the software McAfee provides to make this happen. And if it does need any external components, Intel can easily partner with a host of players in the newly emerging fields of cognitive and network-based security systems. Much of future security will be created and deployed by new-age security companies, so Intel would be better off to have more flexibility in finding the right partner and may be hampered by being too close to McAfee.

Based on the realignment of Intel’s strategy, the lack of strong synergies going forward, and the need for Intel management to focus on the emerging markets, a separation from McAfee (whether via sell-off or spin-out) makes a good deal of sense. Any technology Intel needs to maintain within the company it already has access to. But it doesn’t need to run a major subsidiary operation like McAfee that isn’t closely aligned with its longer term strategy. So it’s extremely likely that the Intel/McAfee rumors are accurate. The remaining question is, what will the Intel McAfee separation look like?

Jack Gold is the founder and principal analyst at J.Gold Associates, an IT analyst firm based in Northborough, MA., providing research and analysis of the many aspects of business and consumer computing, and emerging technologies. Follow him on Twitter @jckgld or LinkedIn at https://www.linkedin.com/in/jckgld.

Get more stories like this on TwitterFacebook

Click Here For Original Source Of The Article

About Ms. A. C. Kennedy

Ms. A. C. Kennedy
My name is Ms A C Kennedy and I am a Health practitioner and Consultant by day and a serial blogger by night. I luv family, life and learning new things. I especially luv learning how to improve my business. I also luv helping and sharing my information with others. Don't forget to ask me anything!

Check Also

Microsoft’s Seeing AI app for the blind now reads handwriting

Artificial intelligence took center stage at Microsoft's AI Summit in San Francisco on Wednesday. Aside from announcing AI smarts for a range of software -- from Bing to Office 365 -- the tech titan is also ramping up its Seeing AI app for iOS, which uses computer vision to audibly help blind and visually impaired people to see the world around them. According to Microsoft, it's nabbed 100,000 downloads since its launch in the US earlier this year, which convinced the tech titan to bring it to 35 countries in total, including the EU.

It's also getting a bunch of new features. The app now boasts more currency recognition, adding British pounds, US dollars, Canadian dollars, and Euros to its tally. Going beyond the color in a scene, it can also spot the color of specific objects, like clothes. Plus, it's no longer restricted to just short printed text, with handwriting recognition now part of its skill set. You can also customize the voice that it uses to speak its observations out loud, and set how fast it talks.

Finally, a musical light detector alerts you to the light in an environment with an audible tone -- Microsoft claims the tool will save users from having to touch a hot bulb or LED battery to check if it's on. Despite the big update, there's still no word on an Android launch.

Source: Microsoft