Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

Summary: Tech giant Intel on Thursday announced that it would acquire security firm McAfee for about $7.68 billion.

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TOPICS: Intel, Security
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Tech giant Intel on Thursday announced that it would acquire security firm McAfee for about $7.68 billion, placing a price on the company's common stock of about $48 per share.

Santa Clara, Calif.-based McAfee will become a fully-owned subsidiary of Intel, and become a part of Intel's Software and Services Group. The deal will close pending McAfee shareholder approval and regulatory clearance.

The acquisition underlines Intel's bet on "hardware-enhanced security" and demonstrates that that security is a necessary component as the tech company's reach expands to handle billions of new Internet-ready devices, such as mobile phones and computers, TVs, cars, medical devices and ATM machines.

Intel says it has raised the priority of security to the same level as energy-efficiency and Internet connectivity.

"With the rapid expansion of growth across a vast array of Internet-connected devices, more and more of the elements of our lives have moved online," 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."

McAfee has enjoyed double-digit growth over the past year, as well as large margins, to the tune of almost 80 percent gross. It counts about 6,100 employees in its ranks and managed to rake in $2 billion in revenue in 2009.

Here's what Intel senior vice president Renée James had to say about her new group:

Hardware-enhanced security will lead to breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow. This acquisition is consistent with our software and services strategy to deliver an outstanding computing experience in fast-growing business areas, especially around the move to wireless mobility.

McAfee is the next step in this strategy, and the right security partner for us. Our current work together has impressive prospects, and we look forward to introducing a product from our strategic partnership next year.

The McAfee deal comes after a series of acquisitions by Intel, ranging in scope from gaming to visual computing to embedded device and machine software.

Topics: Intel, Security

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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55 comments
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  • Smart move

    M&A activity is picking up, I wonder what else is in the works? Cisco/Dell? HP/Intuit? The funniest one I heard was Oracle buying Adobe, Ellison sticking his thumb in the eyes of both Apple and Microsoft ...

    On the McAfee thing, security is one of the main things that keeps our company from committing more work to cloud systems. Now I'm waiting to see if Intel gets into the cloud provider business. It's not so far-fetched, the big semiconductor companies have massive compute-farms to support chip design and manufacturing, and Intel has a lot of experience internally in managing them.
    terry flores
    • Possible combo

      @terry flores

      I wouldn't be surprised to see HP buy up AMD.
      Joe_Raby
      • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

        @Joe_Raby

        They were prevented from doing so by their Itanium alliance with Intel, now that Itanium is all but dead, it could be a possibility!
        terry flores
      • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

        @Joe_Raby

        I think HP with the a recent acquisition of Palm and WebOS should seriously look for acquiring location & Mapping platform company, they are way behind on that compared to their peers such as Nokia, RIM and Apple....
        Jim
        shankar6
      • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

        @Joe_Raby

        Actually it's AMD who should buy Symantec becuase since AMD makes chips for desktops and almost all mobile devices Symantec should be AMD's security subsidiary.
        IMOP HP would not make a good fit since they only make printers, destop and laptop PCs, servers and netbooks. But
        on the other hand since HP PC's, Laptops and netbooks do have AMD chips in them it would give HP a hand in making sure that their mobile devices are secure.
        msims2
      • nah

        @Joe_Raby I dont think that HP has the revenue to buy AMD.
        Jimster480
    • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

      look look http://ta.gg/4or
      lincc240
    • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

      @terry flores http://www.reebok-nfljersey-shop.com/
      tokelwey520-24344241213327461230201715753263
  • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

    I thought Intel was out of the A-V business after they dumped LanDesk and sold the VProtect part of it to Symantec.
    Andylb
  • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

    this is the worst news ever for AV users in general. so this is another way to hose not only my OS but my processor as well if McCrappy puts out another debilitating update or if I have to wait another three days for an AV infection discovery? Lord have Mercy on us all...
    tsudhonimh
    • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

      @tsudhonimh Maybe not...integrating anti-virus at the chip level (if that's the plan) will require Intel to really focus on improving the functionality and staying on top of discovery - they have too much to lose. But I think we all can understand your concern.
      ITBusinessman
  • Is this the beginning of Anti-virus Chips?

    After seeing this on Twitter from ZDNet's Adrian Kingsley-Hughes, a discussion sparked off among my colleagues (it's a slow day).

    Does this mean that Intel might think about creating Anti-Virus chips / cards?

    What if all your AV requirements were passed of to a separate processor & RAM? Freeing up resources on the CPU & System RAM for actual running of the OS & software.

    We use McAfee here and it has some bad side effects when it updates the DAT files on the client machines. On Virtual Machines (1GHz VCPU, 1GB VRAM) if they update happens when the user is using the machine it grinds everything to a halt for the duration of the update, the rest of the time everything runs smoothly. Moving that work away to a separate chip set could be a constant on-access scan with no performance dip.

    Or am I just shooting way off?
    DevJonny
    • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

      @DevJonny I hope so. It would free processor time a lot. And after that, they could think of building a really good graphics co-processor and a sound co-processor like Amiga and Apple did like in the 80s.
      eduardonolazco
      • How do you update hardware?

        @eduardonolazco usually that takes a firmware upgrade - which is probably not the easiest/best way to (constantly) change the virus patterns.

        I liked my Amiga! But there are equivalents today - The IBM Cell and the Sun CMT chips use a coprocessor architecture (as opposed to multiple cores). You could theoretically program a Cell to be an Amiga-on-a-chip with each "cell" doing the co-processing (Denise, Fat Agnus, Paula, etc...).
        Roger Ramjet
      • No, hardware AV is not the solution.

        @eduardonolazco
        Hardware AV is not a good solution. Hardware is fixed you can't change and that isn't a good fit for AV.
        DevGuy_z
    • AV on a Chip

      @DevJonny

      Couldn't agree more...by doing it at the hardware level it could make security OS independent. Wouldn't that be a neat trick?
      htotten
      • No, AV is not a good fit for hardware.

        @htotten
        The AV world is a world of change - definitely not a good fit for hardware. Besides the problem looks like a software problem in the first place. I've used competing products that don't have the problem you are describing.

        Multiple cores largely solve the multi-tasking issue anyway.
        DevGuy_z
      • OS Independence

        @htotten

        but aren't viruses OS dependent ?
        esanchezvela
    • Doubt it.

      @DevJonny
      With multi-core there really isn't a need for a separate HW based AV chip. And hardware AV would never work because the AV/malware landscape is always changing.

      The installation will be helped with multi-core too. I suspect that much of the problem is McAfee's approach. I don't have the same problem with Symantec or Microsoft Security Essentials. Very fast updates

      Intel has already added to SSE the ability to scan strings of data in hardware. This would improve scan speeds.
      DevGuy_z
      • RE: Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

        @DevGuy_z Are you dumb as shit? You can flash a BIOS, right? So what makes you think hardware is stagnant?

        I think an AV Chip would be totally awesome. Just put in a new chip, flash it when it needs to be updated, it operates all the time even if an assjack takes your cool gear. Rock and Roll.
        prof.ebral