Many Internet users are familiar with the security software maker McAfee to protect them from viruses and keep their computers running smoothly. Now even more people are becoming aware of McAfee after Intel announced Thursday they will acquire McAfee in a multibillion dollar deal. Word of the Intel/McAfee merge is trending in the top ten of Yahoo Buzz.
NPR reports, “The stock price of Internet security company McAfee soared Thursday with the announcement that it’s being bought by Intel. The deal still needs approval from shareholders and government regulators, but the computer-chip maker plans to pay more than $7.5 billion for its neighbor in Santa Clara, Calif. Intel is expanding into the fast-growing mobile industry, making chips for smart phones and other portable devices. It needs to make these devices secure, which is where McAfee comes in”
The Christian Science Monitor reports, “The deal, announced Thursday before the market opened, will help Intel improve the security of its chips by sharpening the software that goes into them. It also opens a new revenue stream for Intel, which will sell security software alongside new chips it’s developing for devices such as mobile phones, televisions and even cars. Intel is the No. 1 maker of microprocessors for personal computers and servers. The $48-per-share price represents a 60 percent premium over McAfee’s Wednesday close of $29.93. McAfee shares surged $17.17, or 57 percent, to $47.10 in midday trading Thursday. Intel shares slipped 63 cents, or 3.2 percent, to $18.96.”
Both Intel and McAfee are based in Santa Clara, California. Intel has reportedly said security is now a fundamental component of online computing, but today’s approach to security isn’t adequate for the growing availability of Internet connections on mobile phones, medical devices, ATMs, automobiles and elsewhere companies with about $2 billion in revenue last year. McAfee, also based in Santa Clara, is one of the world’s largest security technology.
Information week reports, “Analysts believe Intel will leverage its commanding presence in the PC processor market to boost McAfee’s sales. One scenario could see Intel bundling McAfee security offerings with every chip it supplies to computer manufacturers.”
In a statement on the McAfee website the company writes, “Today McAfee agreed to be acquired by Intel Corporation. Obviously this is big news for McAfee, big news for Intel Corporation, big news for our combined customers, and big news for both the security industry and the future of the Internet. It’s the company’s common belief that security is a fundamental component of modern computing, and the acquisition reflects its increasing relevance in a completely connected world. The number of connected devices is expected to grow from 1 billion to 50 billion by 2020. This explosive growth of Internet and IP-enabled devices (e.g. Internet enabled TV, IP addressable cars, ATM machines, medical devices) is fundamentally reshaping communication, collaboration and commerce opportunities for individuals, businesses and governments around the world.
Unfortunately, cyber-criminals and cyber-terrorists are misusing the Internet’s open and any-to-any communication architecture for malicious purposes, leaving many users at risk and the future of the Internet as we know it in question. Cybercrime costs over 1 trillion dollars to society, the identity of 100s’ of millions of individuals have already been compromised and dozens of governments around the globe have already been targets of cyberwarfare.
The current cybersecurity model isn’t extensible across the proliferating spectrum of devices – providing protection to a heterogeneous world of connected devices requires a fundamentally new approach to security. Frankly, the industry needed a paradigm shift – incremental improvements simply couldn’t bridge the opportunity gap. McAfee and Intel Corporation are joining forces to tackle this next generation cybersecurity issue which impacts everyone and anything connecting to the Internet
Intel Corporation has always thought about the two key pillars of computing devices as being power efficient performance and Internet connectivity. Going forward, our two companies believe security has become the third pillar of computing – and it will continue to grow in importance – in all segments of the market. By bringing McAfee’s core security DNA within Intel Corporation, we believe we can offer better solutions and products to the market.
Intel Corporation has a successful software business built in part by acquiring companies, such as Wind River, that bring an expertise in solutions and services in order to deliver high-performance platforms to fast-growing sectors. McAfee is the next step in that strategy, and brings together security and hardware expertise that will better protect consumers and businesses and drive innovation across Intel Corporation’s product offerings.
McAfee is the best security partner for Intel Corporation – something they recognized based on many years as both a customer and successful collaborator on a variety of innovations. In fact, by next year, we will introduce new security offerings as a result of our collaboration.
As with Intel Corporation’s other software acquisitions, McAfee will remain a stand-alone subsidiary, retain its leadership team and expertise, which will facilitate future innovation in security. Furthermore, this acquisition is driven to create new markets, and not about cost-cutting.
When the acquisition closes, McAfee and Intel Corporation will have the knowledge and scale necessary to capture the opportunity in security, and in turn, deliver growth and value to our customers and our combined shareholders. We expect that together the result will be increased safety, security, and trust in everyday technology experiences. And of course, a reduction in cybercriminal and cyberterrorist threats.
Customers around the world have counted on McAfee to protect them in the past, and now more than ever, they can count on McAfee to protect them in the future.
During the close process as well as following the close, McAfee will continue, in fact, to strengthen its security focus, and consumers will experience no change in their user experience or industry-leading service from McAfee. The expectation is that upon close McAfee will operate as a wholly-owned subsidiary of Intel Corporation, sustaining our focus on providing leading-edge security solutions, while gaining the benefits of Intel Corporation’s technology investments, market-reach, brand and global employee base.
This is very exciting news. There is no better partner that McAfee could have found than Intel Corporation. They share our vision for security, they share our vision of a connected world, and working together we’ll be far stronger globally and able to make a much bigger difference in people’s lives.”
Last month, Intel Corp. reported its largest quarterly net income in a decade as the chipmaker benefited from a stronger computer market and more sophisticated factories. For more information about Intel and McAfee, multi billion dollar deal click here.