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Posted by Jonathan Penn on August 19, 2010
Intel and McAfee, the odd couple of technology? At first blush, Intel is not a "best fit" acquirer like HP or IBM which have major software businesses, existing security solutions, and related capabilities such as systems management. And, Intel is not a services company either. So it's straightforward to spot the potential problems that need to be addressed.
But a longer-term perspective indicates that these two companies are on to something fundamental and could create a force to be reckoned with within the tech industry. We believe embedded, or integrated, security is the future. The acquisition is ahead of the market and will thus accelerate this evolution. Standalone security products, and the companies that create them, are on borrowed time. We will see security embedded into hardware, in mobile devices, M2M devices, smart computing devices (e.g., smart grid meters), laptops, and just about everything else. Embedding security at the chip level is not a new concept either. Companies like Renesas and ARM already do this. Cisco has also been embedding security into the network, while Microsoft has embedded it into the platform. In systems, we see embedded security in Internet service provider (ISP) devices most prevalently today.
In buying McAfee, Intel is betting that it can embed security functions into the chip level (enabled by the software -- there's a software silicon interplay here), first on PCs and appliances, and then on a range of "post-PC" devices. It also doesn't have to be self contained in the hardware, but security functions in the hardware could be enabled by software from McAfee. That looks like the right vision to us. This goes beyond mobility and smartphones. In areas like smart grid/meters, healthcare devices, Internet-connected TVs and game consoles, and other "smart" technology to come, security will be built in, not bolted on.
Execution is another matter. Adoption of embedded security has barely started, so Symantec may benefit in the short run due to customer uncertainty over this deal, or organizational missteps in integrating the two companies. But over time, Intel’s strength in partnerships and channels will work in favor of this marriage. Intel could push McAfee technology into systems and devices before Symantec even begins conversations with customers, especially in the smart computing arena. On the mobile and portable devices front, the appeal of an embedded and more bulletproof security component could be used as a selling point against ARM.
Please weigh in via the comments; what do you think?