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Posted by Jonathan Penn on August 23, 2010
Questions keep pouring in about this deal, so I'll attempt to answer the most common ones here. Practically every analysis I've seen calls this a "head-scratcher", and so they slam the deal simply because they don't understand it.
Yet while Wind River has been mentioned several times as a model for execution, everyone seems to have overlooked the interesting synergies between Wind River and McAfee. Wind River already has some embedded security features, and specifically ones that McAfee lacks, such as SSL VPN, wireless security, and crypto libraries. For embedded security, Wind River and McAfee are excellent complements.
I’m going to look to future acquisitions as a key indicator for whether this deal will be good or bad. Acquisitions are critical for the success of a diversified security vendor. There’s not enough of a track record yet with Wind River to see if Intel will support McAfee’s growth via acquisition (Wind River has had one small technology acquisition, Virtutech, since being acquired by Intel). A key question moving forward is, "How much leeway will McAfee get to acquire?” Or let’s pose the question this way: “If McAfee were part of Intel at the time, would it have been able to buy Secure Computing?”
So what is a good model out there? I pick EMC/RSA as a better model to emulate. EMC has been embedding some of RSA security technology into its products, it continues to support the RSA product lines in and of themselves, and it also develops new solutions that span lines of business (virtualization security and data classification come to mind here). Moreover, EMC has built RSA into a broader and more successful security business by acquiring Network Intelligence (SIM), Tablus (DLP), and Archer (GRC). RSA is now the brand of EMC’s security division, not just its authentication and encryption product lines. It is a stronger player in the market than it would have been if EMC did not acquire it and it had been left on its own.
The wisdom of the Intel-McAfee deal and long-term success of McAfee will hinge both on future acquisitions and support of its growth as a standalone security business and also on Intel’s ability to combine McAfee technologies and its own in new ways.