Why Intel bought McAfee for $7.68 billion

Intel sold its anti-virus software division to Symantec in 1998. 12 years later the chip giant acquired McAfee for a whopping $7.68 billion. Why?

Well, hard questions related to Intel’s activity in the security sphere certainly have been asked before.

Back in September 1998, veteran tech journalist Mike Magee pointed out that Intel’s decision to incorporate hardware primitives into future chips was made just months after the company offloaded its security business to Symantec.

“[Such] primitives would not only give truly random numbers but also incorporate other security features, including encryption and 10 other primitives,” Magee wrote in the Register.

“That begs the question as to why Intel sold its anti-virus software to Symantec.”

Although Magee’s rather pertinent question remained unanswered for nearly 12 years, it seems as if Intel has once again altered its security strategy by bringing software closer to silicon – albeit with a salient emphasis on the mobile sphere.

Indeed, according to Intel spokesperson Suzy Ramirez, combining McAfee’s software with hardware will allow the corporation to design more secure wireless devices. 

“We see [this as] an opportunity to bring software closer to silicon and help Intel strengthen it’s security to more effectively counter some of the increasingly sophisticated threats we’re seeing today and in the future,” she explained.

Meanwhile, industry analyst Rob Enderle told TG Daily that Intel’s acquisition of McAfee proved the chip giant was quite “serious” about both the mobile and embedded markets.

“Intel plans to provide a bundled solution that includes security to address this emerging threat,” said Enderle.

“That is the way the computer business initially came about, with security embedded into the solution. This combination could give them a significant advantage against other, less secure alternatives.” 

Enderle also noted that Intel’s decision to snap up the anti-virus company at higher than market value was little more than standard procedure.

“You have to purchase the securities from the current owners and typically have to offer a significant premium to get those owners to sell their shares. By doing it this way you cut down dramatically on the amount of time it takes to close the deal.

“So, once something like this is announced – the longer the deal takes to complete the lower the value of the property you are buying. As such, every effort is made to close the deal quickly and the premium is worth that,” he added.