What's it all about: McAfee? What you need to know

Intel’s $7.68bn takeover of the McAfee security and antivirus business has taken a lot of people by surprise, including me. In some respects, it shouldn’t have. Intel is already a software giant, and it has been in the security business for a long time.

Indeed, during today’s conference call about the deal, Intel said that it had been working with McAfee for 18 months, and that the new security features were already included in its Core range of PC processors. You may already be using them. If not, you can expect them to appear in your next-generation TV sets, tablets, mobile phones and other gadgets.

Intel does software: This is by no means the first software company that Intel has bought, and previous purchases include Virtutech, Cilk Arts, Rapid Mind, Wind River, Havok, Neoptica, Offset, OpenHand, Swiftfoot Graphics, Sarvega and Elbrus/Unipor. Obviously none of these is on the same scale, but it shows a continuing interest in software.

After the $884 million takeover of Wind River, Intel said that its Software and Services Group (SSG) “would be among the world’s top 10 software companies if it were an independent organisation.”

Intel does security: Intel has been involved with the security industry for a long time. In fact, it used to have its own anti-virus business, with LANDesk Virus Protect, which it sold to Symantec in 1998. As part of the deal, Intel agreed to market Norton Anti-Virus through its reseller channel. (Separately, Symantec also bought IBM’s anti-virus business.)

Some of Intel’s security interests are visible in its VPro platform for business PCs. These include Intel Trusted Execution Technology (Intel TXT), Intel Active Management Technology (Intel AMT), and the IT industry’s Trusted Platform Module. The general idea is that companies should be able to securely wake up PCs on the network and manage them, regardless of whether they have been turned off or had their operating systems corrupted.

An article in TG Daily in 2008 fingered the technology: Big Brother potentially exists right now in our PCs, compliments of Intel's vPro. It pointed out that PC equipped with an Intel Core 2 processor, Q45 chipset and an 82567LM network chip allowed “covert remote access” via Intel’s vPro, “And, it's built right in.” It said:

This combination of hardware from Intel enables vPro access ports which operate independently of normal user operations. These include out-of-band communications (communications that exist outside of the scope of anything the machine might be doing through an OS or hypervisor), monitoring and altering of incoming and outgoing network traffic. In short, it operates covertly and snoops and potentially manipulates data.

On-chip and therefore hard-to-hack pre-boot security technology is, of course, very appealing to large corporations. And Intel didn’t need to buy McAfee to deliver it.

The main reason for the deal is that there will soon be tens of billions of vulnerable internet devices to manage remotely, and Intel hopes that billions of them will be powered by Intel Atom chips. This includes TV sets, netbooks, tablets, mobile phones, set-top boxes and many others. During the conference call, Intel said the McAfee takeover would lead to something "based on already existing technologies" in Intel's PC products, which sounds like vPro-style technologies for Atom chips. And you can expect the first examples in the first quarter of 2011.

Of course, most buyers won’t even know these security features are built in, just as you (probably) didn’t know that your PC already had some vPro hardware features.

George Kurtz, McAfee’s chief technology officer, was a little more specific. In a blog post today, he pointed out that “McAfee is a perfect fit with the Intel acquisition of Wind River, a leader in embedded and mobile software,” and added:

McAfee’s strategy of protecting the multitude of devices such as ATMs, printers, digital copiers, and cars fits with helping organizations better manage and protect the IP enabled mobile and embedded devices that run Wind River embedded and mobile software. This also dovetails nicely with McAfee’s acquisition of Solidcore, a leader in dynamic whitelisting technology that already provides protection for millions of embedded devices.

Assuming everything goes to plan, then Intel has two answers as to why it’s buying McAfee, rather than continuing their evidently-fruitful strategic partnership. The first is that "it’s a differentiator going forward". In other words, Intel will be able to build technologies into its chips that are simply not available to rival chip suppliers (eg ARM). The second is that it “adds substantial value to our platforms”. Intel expects to make more money by selling security along with silicon, and it wants the profits to go to Intel shareholders.

Otherwise, I expect to see McAfee continue with its consumer-oriented antivirus and other businesses, as before. Of course, there might well be a small change to the box that says McAfee is “An Intel Company”.

Intel acquires McAfee (Press release)