Intel - McAfee Merger Could be Lucrative

In this week’s Barrons technology writer Eric Savitz’s headline was, “Intel's Brilliant or Bonehead Deal.” The article quoted a few analysts who like Intel

but are skeptical about the deal. That’s not unusual for Wall St. because most mergers don’t work out. What the article didn’t contain was any discussion of the science of Intel’s claim that the purpose of the merger was to create chips that will have security embedded in them. Perhaps Savitz is too close to Wall St, or it was just lazy reporting. A better explanation of the science of the merger was found in an article written by veteran technology writer Wayne Rash in Eweek entitled, "Intel, McAfee Merger Plugs Network Security Hole." Here’s what Rash thinks about the merger: “Intel didn't buy McAfee just so it could have its own PC-based security software. If that's all Intel wanted, it could simply license it.” “What most analysts are missing is that there's a huge, and rapidly growing, universe of network-connected devices that are quite simply unprotected: a wide range of products from network-connected printers to Internet-aware security systems in buildings. These devices can be cell-phone switching systems, power grid controllers and HVAC systems, and they can also be network-equipped television sets, video disc players and DVRs. There are even network-equipped kitchen appliances. And we haven't gotten to the mobile devices that people carry around, such as iPods, smartphones and GPS receivers.” As far as internet capable consumer devices, Rash said this: “None,as far as I could tell, include any sort of security.” Rash goes on to explain that most printers and fax machines at the office are not only unprotected but security breaches could threaten the entire enterprise network: “ Nearly every printer intended for the business environment is network-capable. Fax machines come with Ethernet connections these days. And of course employees at all levels are using their office computers to charge and sync their mobile devices. Almost none of these have any sort of security." Embedding security on chips could turn out to be very lucrative for Intel, thinks Rash: “One of Intel's big products is a line of wired and wireless Ethernet interfaces. Providing an interface with built-in security would be a real differentiating factor that could help Intel gain market share in the non-PC world, and this is the part of the industry that's growing the fastest.” How will Intel monetize all of this new security? “Because these devices are already connected, all Intel and McAfee need to do is create an ecosystem of device updating and reporting that not only keeps the protection current but also reports on emerging threats, much as McAfee's current computer security products do. Once this happens, you've got a subscription model that's groundbreaking, while also providing a significant level of protection for the Internet at large,” writes Wayne Rash. The Futures & Forex Expo is approaching.