Intel to buy McAfee as it eyes wireless market

 Intel is buying Internet security firm McAfee for 7.68 billion dollars, as the computer chip giant seeks to expand its reach to mobile and wireless devices.

Intel, whose processors power nearly 80 percent of computers worldwide, has arranged to pay 48 dollars per share for all of McAfee's common stock, a 60 percent premium on the security vendor's closing value Wednesday.

Panda Security chief executive Juan Santana welcomed the Intel move as good news for the industry and said he suspected that a factor in McAfee's decision to sell was increasingly tough competition in the market.

"As we have been saying all along, security has to be a pillar in next-generation computing," Santana said.

Intel is buying Internet security firm McAfee for 7.68 billion dollars, as the computer chip giant seeks to expand its reach to mobile and wireless devices

"Time will tell if the acquisition is good news or not for McAfee and Intel?s users, partners, employees and shareholders; but I agree that it is clearly elevating the importance of IT security to new heights."

Intel had also been eyeing McAfee technology for keeping data secure in "cloud computing," a growing trend for applications or information storage to be hosted as services on the Internet, according to Santana

Boards of directors for both companies have unanimously approved the take-over, which is still subject to approval from regulatory authorities.

The acquisition of one of the world's largest anti-virus software companies underscores Intel's bid to move into mobile phones, in-car navigation systems, televisions and medical devices as the traditional PC market nears saturation.

"There is an explosion of billions of devices on the Internet that need to be secured... The embedded market is very specific and a high opportunity market for us," Intel's head of software Renee James told journalists.

McAfee chief executive Dave DeWalt emphasized the huge potential for Internet security business as wireless devices become increasingly ubiquitous in day-to-day life.

"Cybercriminals and cyberterrorists 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," he said in his blog following the acquisition announcement.

"We are joining forces to tackle this next generation cybersecurity issue, which impacts everyone and anything connecting to the Internet," he wrote.

Carmi Levy, an independent technology analyst based in London, Ontario, explained that Intel will now integrate security software directly on its microchips.

"This is the beginning of a security-on-silicon age," he said.

Intel expects to have the first integrated microchips out on the market in the first half of 2011, which should give Intel an unparalleled edge over its competitors, mainly Advanced Micro Devices (AMD).

"As you move this capability from software to hardware it becomes significantly more efficient and powerful," Levy told AFP.

"You can only make a processor so fast and so powerful, at some point it has to do more than the competition, so a processor with integrated security, for example, has a much more powerful value."

Experts believe that Intel will introduce its integrated processor in a new smartphone chip platform due for release in 2011 as well as the upcoming Google TV, a service which will enable viewers to browse the web while watching TV.

Intel chief Paul Otellini said McAfee fitted well into his company's "software and services strategy," especially in enhancing "wireless mobility."

McAfee, based in Santa Clara, California and founded in 1987, boasted about two billion dollars in revenue in 2009.

The McAfee deal added to a series of acquisitions by Intel, ranging in scope from gaming to visual computing to embedded device and machine software.

It also came a month after Intel reported its best-ever quarterly results in an ongoing rebound in the semiconductor market.

"Intel's acquisition of McAfee signals to the industry that smartphones and other connected devices are joining the web of devices we trust with critical data and that these devices need to be protected," said Lookout Mobile Security chief executive John Hering.

"We have seen threats rising across the major mobile platforms and expect this trend to increase as mobile devices continue to become the dominant computing platform."

In a further sign of the shifting market trend towards integrated hardware, computer manufacturer bellwether HP announced on Tuesday the acquisition of security software firm Fortify Software.

source AFP

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