Intel Buying McAfee for $7.68B, A Bold Move
Intel finally decided last Thursday to buy security-software maker McAfee Corp. for $7.68 billion, in what looks like a major bet on the need for enhanced security at the hardware layer, as corporate computing becomes increasingly mobile and continues to move into the cloud. The acquisition will give the company a suite of products from software to services that it can tie to its hardware in order to appeal to corporate customers.
Intel CEO Paul Otellini said in a 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 price Intel agreed to pay for McAfee — which had revenue of $2 billion in 2009 and has gross profit margins in the 80-percent range — is a 60-percent premium to its trading price prior to the announcement. This isn’t the chipmaker’s first big bet on software by a long shot. Last year, Intel bought Wind River, a software company focused on the mobile and embedded market.
With the number of IP-enabled devices of all kinds expected to balloon to 50 billion or more in the next decade, having a multi-platform security offering will become even more important. Intel clearly has its eye on that ball as it tries to maintain its IT dominion. The McAfee acquisition could allow Intel to offer a way to securely tunnel between client devices and servers in the cloud, with security on a mobile chip as well as on the server side. There’s also McAfee’s software and services business to tap into.
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