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You are here: Home / Security Solutions / Intel May Be Shopping Security Biz
Report: Intel May Be Shopping Security Division
Report: Intel May Be Shopping Security Division
By Dan Heilman / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
The antivirus software maker previously known as McAfee might be on the selling block. Intel is weighing its options for Intel Security, including possibly selling the antivirus division, according to a report published today. Intel bought McAfee for $7.7 billion in 2010.

The chipmaker has been in discussions with bankers about what it can do with the security division, including possibly pitching it to a group of private equity buyers, sources close to the situation told the Financial Times. Intel declined to comment to the Financial Times.

Intel has attempted to shift its focus toward delivering chips for cloud computing and connected devices. When it announced the purchase of McAfee, Intel said that increasing threats to the security of such Internet-connected devices as PCs, mobile devices and cars called for a new approach to protection.

The company had planned to build McAfee’s security technology into its chips, thereby creating a new level of security in hardware products. After purchasing McAfee, Intel renamed the company Intel Security but kept the McAfee brand on some products.

Bad Merger?

Rob Enderle, principal analyst at the Enderle Group, told us the McAfee purchase was a misstep by Intel and it would be wise for the company to step away from it.

"They wanted to build security into the processors, but that wasn’t something McAfee was expert at and they were slow to involve the McAfee folks in the process," said Enderle. "Intel didn’t seem that interested in the majority of McAfee’s business, and virtually all marketing was cut for the products with the combined impact of badly damaging McAfee’s sales. In the end, this became an example of how not to do a merger."

Now might be a good time to attempt a sale, as cybersecurity concerns grow in number and scope, especially for enterprise customers. In addition there has been interest from private equity buyers. Earlier this month, Bain Capital sold the Blue Coat Security cyber defense company to Symantec for $4.65 billion, nearly twice the $2.4 billion it paid for the company last year. Vista Equity Partners also bought Ping Identity, an authentication service, for a undisclosed sum.

Failed Experiment

It’s also possible that Intel can use the cash. A decline in the PC market led Intel to restructure its business and cut 12,000 jobs recently, marking its largest workforce reduction in 10 years. Even though making chips for PCs still accounts for a healthy portion of Intel’s sales and profits, the company is trying to shift its main focus to selling chips for cloud computing.

"It was a failed experiment," Enderle said of the McAfee purchase. "Not because the idea was bad -- it wasn’t -- but the execution, due to major Intel distractions, wasn’t adequate. And, like a lot of projects held over from a prior administration, the current leadership just doesn’t seem to see the value in McAfee that the prior leaders did."

Image credit: Intel.

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