Intel spells out logic of McAfee deal

$7.68bn union will bring about a whole new category of product, according to chip maker

Paul Otellini: Security will be most effective when enabled in hardware

Intel argued last night that security will be most effective when it is combined with hardware, as it laid out the logic for the vendor’s $7.68bn move on McAfee.

Renee James, senior vice president of the chip maker’s Software and Services Group, said the duo’s co-operation would usher in a new product category.

On a conference call, James stressed that Intel and McAfee have been working together for over 18 months and that the first fruits of the partnership will be released as early next year.

“We can continue to have software-only security solutions and that’s a growing and robust market,” she explained.

“The way to think about this is enhanced security solutions that can be hardened and new opportunities to deter threats that we can’t do today alone in software. We think of it as an enhanced category of products that can only be created by unique hardware innovations in combination with the software product sets McAfee sells today.”

That was a view echoed by Intel chief executive Paul Otellini, who asserted that security will be most effective when enabled in hardware.

Asked why Intel had seen it necessary to buy McAfee rather than just partnering, Otellini said it had become apparent through their early co-operation that integrating McAfee’s software would “add substantial value and differentiation to our platforms”.

“It became clear to us that the value of that offering was fairly significant – and it made sense from a financial perspective to have that value accrue to Intel shareholders,” he explained.

Intel also said that it hoped the transaction may close as early as before the end of this year. The vendor also stressed it will maintain all of McAfee's current product lines and its support for multiple architectures.

Anthony Miller, managing partner at analyst TechMarketView LLP, said the deal made strategic sense but also sparks questions about the future of how security is delivered.

“But if integrated security is the way to go, who pays for it and how?” he said. “Does it just become part of the price of buying an Intel processor? Or do we have to start paying a licence fee to Intel each year to get the regular virus updates, like we do for most software-based security products – including McAfee?”