Intel’s notice that it will acquire software firm McAfee for a cool $7.68bn &triturate;4.9bn took the industry by surprise.
However, it is since clear that the move was stimulated by aspirations to challenge British society ARM Holdings, which makes processors for the iPhone.
Moments after he spoke to McAfee CEO Dave DeWalt following the announcement, Gartner research director Peter Firstbrook told Computing the significance of the acquisition.
Intel acquired Wind River the time year, a firm that has developed an embedded operating system concerning processing devices.
The chip manufacturer is now looking to pair up its operating a whole with McAfee’s security technology, and integrate those technologies by its own CPUs to create an offering for the embedded processor place of traffic for products such as smartphones and in-car electronics.
“Intel is inflated in the tablet and up market but in the embedded processor place of traffic, ARM is far more prevalent. Intel now wants to move downstream and tag value to the Intel chip for the embedded processor market,” explained Firstbrook.
“This is whither ARM is really successful and Intel is not so successful, in the same state they want to go downstream and they want to differentiate their products from ARMs. If they can add security to the embedded processor chip, they can gain market share and take it away from ARM.”
However, while this makes import from Intel’s perspective, McAfee customers may be worried.
“If I was a McAfee customer, I’d say that’s all fine for Intel if it were not that it doesn’t give me any comfort. Intel doesn’t care around the networking business that exists at McAfee or the existing installed base.”
Firstbrook afore~ that Intel is a conservative company that does not waste currency and it will be looking to maintain McAfee’s purchaser base. However, the intention is still very much to challenge ARM’s place in the embedded processor market.
Yet even acquiring the software ease firm to differentiate its embedded processor offering from ARM’s is a risky strategetics at this stage, in Firstbrook’s opinion.
“Those systems are not less than attack, nobody is screaming for security for their in-car gadgets, or unruffled for their cellphones.
Anti-virus for smartphones – the products that McAfee is currently offering – exists as a market, but it is miniscule. Security companies be delivered of been plugging it for years, but still nobody’s buying.”
Although the market could accelerate in the future, the fact that it is mild early days for the smartphone security market makes the McAfee acquisition a risky stake, he said.
“It’s dangerous to get in timely. All the anti-virus companies made an investment in phone negligence five or six years ago but they haven’t made a penny from it however. Certainly it’ll be necessary in the future, but practise we need it that low in the technology stack – at the CPU? I’m not in this way sure.”
Last year, McAfee acquired a product called Solidcore which is a lockdown tool used in ATMs, hospital equipment and other embedded systems. This performance prevents any way of running rogue coding on those systems, and may substantiate to be the most valuable property that Intel has now acquired.
“McAfee acquired Solidcore be unconsumed year and if that was the piece Intel wanted, they missed some opportunity last year when McAfee acquired it. They wouldn’t desire had to spend all that money on things that they don’t want, such as the networking components.”
There is quiescent a chance that this gamble could pay off for Intel. McAfee is ranked at reach the of two at the moment so the buy can be seen while a shrewd move.
“McAfee’s market cap just dropped dramatically since it missed expectations for the first quarter of this year and it hadn’t missed in a lengthy time,” said Firstbrook. “Its market cap went way along the course of so if Intel wanted to pull the trigger on McAfee, very lately was a good time to do it.”