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Intel buys McAfee

Intel buys McAfee

Intel's deal with McAfee sees the chip giant spending nearly $7.7 billion - but why?

Intel yesterday announced plans to acquire McAfee in a deal valuing the anti-virus specialist company at $48 per share for a total value of $7.68 billion - but the question remains: why?

Announced in a press release yesterday, the news took the tech world by surprise: Intel is, after all, primarily a hardware company, and has never shown an interest in the anti-virus market sector before.

Intel top dog Paul Otelini claimed in a statement that "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," and explained that Intel wants to be at the forefront of that new wave.

The move doesn't mean that Intel will be turning into a software house, however: Intel's Rene James' reference to "hardware-enhanced security [that] will lead to breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow" provide a clue as to where Intel is hoping to take McAfee's technology - but there are other rumours circulating, too.

Alex Vallecillo, a fund manager at PNC Capital Advisors, is quoted over on BusinessWeek as pondering whether Intel's purchase - combined with its recent attempts to push its new, lower-power Atom processor models - represents another facet of the company's assault on the smartphone market. McAfee's chief executive Dave DeWalt appears to partially confirm that particular theory, in a blog post - quoted by InfoWorld - which suggests the overall aim of the merger is for the company to be able to provide "end-to-end" mobile security.

The main point that appears to be confusing analysts is the valuation: at a 62 percent premium of McAfee's last traded stock price, the value of the deal appears way overblown with TechMarketView analyst Anthony Miller telling PC Pro that the high valuation suggests that "Intel very much wanted [McAfee] and was prepared to pay full price to get it."

Should the merger result in hardware-accelerated security packages - whether for smartphones or otherwise - Intel could get a head start into a market in which other companies are already starting to show an interest. Back in 2009 graphics card manufacturer Nvidia revealed that it was working on a CUDA-based anti-virus that would harness the power of your GPU to provide full protection without burdening the CPU, while long-time McAfee rival Kaspersky holds a patent on "a hardware-based antivirus system that effectively combats rootkits."

Whether you agree with Intel's valuation of McAfee or not, one thing seems certain: anti-virus technology is set to make the move from software to hardware, and fast.

Do you think that Intel will be able to make good use of its latest acquisition, or has the company just sunk a vast quantity of money in unreliable technology? Share your thoughts over in the forums.

35 Comments

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crazyceo 20th August 2010, 11:23 Quote
Didn't the BBC get this story yesterday?
Omnituens 20th August 2010, 11:24 Quote
Hardware antivirus? please, no.

Anti-virus software has caused more grief with games than anything else. DO NOT WANT.
crazyceo 20th August 2010, 11:28 Quote
Intel and AMD are going for the virtual system management which will be real time monitoring using their remote managed services. Every component would be able to tell the monitor what condition its in and whether its about to fail and cause panic on the system. This communication must be secure and maybe buying McAfee will help secure the process without using a third party security provider. So it will be all bundled together. Nice plan and it will surely help link the hardware with the software a lot easier.
eddtox 20th August 2010, 11:54 Quote
Maybe this will result in anti-virus that isn't bloated crap, for once.

(i swear AV uses up more processor cycles than anything else on my system)
do_it_anyway 20th August 2010, 12:02 Quote
I actually feel quite excited about hardware antivirus.
I agreee that antivrus software can cause havoc with games, but so can firewall software. And most (if not all) of us have introduced a hardware firewall to our systems in the last 5 years.
This also causes a bit of a pain with some games, but its quite a simple procedure to get it working.

It interests me though that even though we all have a hardware firewall, many people (myself included) don't fully trust them, and still have a software firewall as well.
Intel will have to accept that even if they make an excellent hardware antivirus, it will take a lot to convince people to drop their software antivirus cover.
billysielu 20th August 2010, 12:07 Quote
So will hardware fail without downloading up-to-date virus definitions?
What if your hardware gives you a false-positive? How can you recover?
do_it_anyway 20th August 2010, 12:15 Quote
Quote:
Originally Posted by billysielu
So will hardware fail without downloading up-to-date virus definitions?
What if your hardware gives you a false-positive? How can you recover?
My understanding is that it will "sit" between the hard drive and motherboard and monitor "normal activity". If something abnormal happens it blocks it and tells you. You then decide whether to let it continue or not. You recover by allowing that particular programme to do what its doing. In exactly the same way that you allow an exception for a programme now if it turns out to be a false positive.
I also believe they don't need updating as often because they are looking for unusual activity rather than specific files. If a new virus comes out that is entirely new, but behaves in a similar way to an existing one, then the hardware AV will recognise the viral activity even if it doesn't recognise the file itself.

Or am I missing the point?
azrael- 20th August 2010, 12:25 Quote
OK, so Intel wants to buy an antivirus outfit, but for the love of all that is fair, decent, and good WHY BUY MCAFEE?!?!?! They're not really known for their effective scanning technology whether it be performance-related or malware-related.
Skippylee 20th August 2010, 12:32 Quote
Apparently this was a mistake!

Intel CEO: “We need antivirus, can someone buy me McAfee?”
Employee: [Few hours later] “Done.”
Intel CEO: “Great, which version?”
Employee: “Version … ?”
SlowMotionSuicide 20th August 2010, 12:35 Quote
Quote:
Originally Posted by Skippylee
Apparently this was a mistake!

Intel CEO: “We need antivirus, can someone buy me McAfee?”
Employee: [Few hours later] “Done.”
Intel CEO: “Great, which version?”
Employee: “Version … ?”

I lolled.

Have some rep.
tripwired 20th August 2010, 12:38 Quote
Don't forget, it's not just Antivirus they do, McAfee also provide / own the popular 'SafeBoot' system encryption software, used in many corporates.
BRAWL 20th August 2010, 12:38 Quote
Skippylee - my friend had that on his facebook page this morning, gave me a right good giggle.

Now doesn't anti-virus play hell up on all forms of downloads/games, imagine trying to update your BIOS now >.< EXPLOSION!
Skippylee 20th August 2010, 12:40 Quote
Quote:
Originally Posted by BRAWL
Skippylee - my friend had that on his facebook page this morning, gave me a right good giggle.

Yeah m8, I saw it on twitter. It had to be shared in this thread though... it's very funny
thehippoz 20th August 2010, 12:45 Quote
save a lot of people from themselves
Cogwulf 20th August 2010, 12:46 Quote
I see many potential anti-trust lawsuits in intels future. If intel starts releasing hardware which has an anti-virus suite tied up to it, it could block other companies from selling anti-virus software to work on those systems. Unless intel hands out licences for other companies to develop software for the new hardware.
Tokukachi 20th August 2010, 12:46 Quote
McAffee don't just make anti-virus tech, they also bought the company that provides the encryption software that the MOD, NHS etc use, as well as offering many other security products, so it could have nothing to do with there (IMO mediocre) AV package.
perplekks45 20th August 2010, 13:04 Quote
Quote:
Originally Posted by Skippylee
Apparently this was a mistake!

Intel CEO: “We need antivirus, can someone buy me McAfee?”
Employee: [Few hours later] “Done.”
Intel CEO: “Great, which version?”
Employee: “Version … ?”
Bloody brilliant! ;)

I myself have no idea what to think of this... I'll just sit back and wait, as usual.
Pete J 20th August 2010, 13:23 Quote
Can't they use AVG instead?
flibblesan 20th August 2010, 13:54 Quote
Quote:
Originally Posted by Omnituens
Hardware antivirus? please, no.

Anti-virus software has caused more grief with games than anything else. DO NOT WANT.

Time for you to upgrade. I've never had any problems with games caused by anti virus software.

Anyway this is potentially good news for some people as McAfee recently bought Tencubed, who make WaveSecure.
Showerhead 20th August 2010, 13:54 Quote
What made them choose McAfee if they just wanted expertise in the field there are surely cheaper companies. Any idea what patent McAfee could hold that intel would want need?
dyzophoria 20th August 2010, 15:37 Quote
Quote:
Originally Posted by Omnituens
Hardware antivirus? please, no.

Anti-virus software has caused more grief with games than anything else. DO NOT WANT.

hmm, which games?, First time I ever heard Anti-virus software recking games(never experienced one), McAfee Antivirus from 1998 perhaps?hehe,
Sloth 20th August 2010, 16:54 Quote
If they wanted an anti-virus company... why'd they buy McAfee?

Just three days ago I get called up by a cousin to cure a virus problem, get to his PC and see that McAfee is installed and ready, but doing f*** all to fix it. A quick system restore took care of the virus. Can't say I've ever had a decent experience with McAfee, but that was easily the worst. Maybe their encryption services are decent and Intel can use them otherwise I envision a wasted $7.7 billion.
frontline 20th August 2010, 17:26 Quote
I can only assume that they bought it to kill it.
sharpethunder 20th August 2010, 17:44 Quote
Well if fact hardware based av are owned by Kaspersky. They have been granted a patents for them.
thehippoz 20th August 2010, 17:51 Quote
I heard the deal went down in patpong, thialands red light district
HourBeforeDawn 20th August 2010, 18:11 Quote
A) that was a bad investments... McAfee is horrible
B) Wouldnt implementing hardware AV being anti-competitive? I know Microsoft got sued up the ass when they wanted to have built in AV which would prevent the rest of the market from being able to sell what they offered.
and C) well I dont have a C other then this doesnt feel right lol.
dire_wolf 20th August 2010, 18:52 Quote
Why McAfee? That software is a dog . . . buying someone like eset would have made much more sense
HourBeforeDawn 20th August 2010, 20:06 Quote
Quote:
Originally Posted by Skippylee
Apparently this was a mistake!

Intel CEO: “We need antivirus, can someone buy me McAfee?”
Employee: [Few hours later] “Done.”
Intel CEO: “Great, which version?”
Employee: “Version … ?”

Awesome, as for the person who said AV crashes games maybe hes only use to playing with Pirated games? lol.
l3v1ck 20th August 2010, 20:25 Quote
If it is hardware AV, I'll be worried. My nForce4 motherboard is supposed to have a hardware firewall. If I installed the drivers for it, it killed the networking. I'd be dubious about relying on hardware security again.
Plus, with software you have a choice. You can't just swap out bits of chips etc though.
Faulk_Wulf 20th August 2010, 20:55 Quote
And what keeps this from deleting an important Windows file? ...again?
Cthippo 21st August 2010, 00:49 Quote
Quote:
Originally Posted by Neat69
McAffee don't just make anti-virus tech, they also bought the company that provides the encryption software that the MOD, NHS etc use, as well as offering many other security products, so it could have nothing to do with there (IMO mediocre) AV package.

I think this is the key point. I don't think this is about anti-virus software, but rather about hardware accelerated encryption. In fact, I can well see Intel killing off ar maybe selling the AV business in a few years, but keeping the encryption / data security parts of McAfee.

I know that there have been add on encryption accelerator cards on the market for a long time and Intel may be looking to create a hybrid hardware - software encryption system aimed at the server market.

To me this feels like a possible expansion of the HDCP concept. In addition to being able to encrypt and decrypt large quantities of data in real time, I can see this also being developed into a content control model similar to what Adobe does with Acrobat.

I know I'm probably not making a full lot of sense here, but I think that anti-vurus software is the least of what Intel was after.
Idioteque 22nd August 2010, 15:55 Quote
Why McAfee? Every time I've had to fix virus or performance related problems on a computer owned by friends or family McAfee is somehow at least partially responsible. Freaking bloated, overpriced ineffective software.

Now avast is something I can get behind. Also, free.
perplekks45 22nd August 2010, 17:24 Quote
Did you even bother to read Cthippo's post? :|
loner1994 23rd April 2011, 23:03 Quote
[QUOTE=Cthippo]
Quote:
Originally Posted by Neat69
In addition to being able to encrypt and decrypt large quantities of data in real time.

but surly there's AES encryption (built in to all new Intel and AMD CPUs) that can operate at up to 1 gigabyte a second and is commonly used to send top secret information.

but I do agree with the rest of what you said
Xro33 24th April 2011, 18:22 Quote
McAfee is going to be a subsidiarity of intel according to this ZDnet article: http://u.bb/A30 so maybe this is just a move to encrypted all data like HDCP does with video. although i think this is going to help intel its also gonna hurt them in a way. in other terms its not going to be a smooth deal.
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