Mobile Computing News

Photo: McAfee

Processing powerhouse Intel has announced intentions to acquire online security company McAfee for $7.68 billion (£4.9 billion) in a move that’s caught analyst and commentators alike completely by surprise.

A long time in the making

This Intel acquisition, which has been approved by the board of directors of both companies, will see Intel paying $48 per share, representing a 60 per cent premium on McAfee’s closing price on Wednesday. All that stands in the way of the acquisition going through is McAfee shareholder approval and a clearance from competition regulators. No sane investor will reject a 60 per cent premium and there is very little overlap so regulatory clearance is expected, too.

The Intel McAfee deal came on the heels of the two companies working closely together for the last 18 months, according to the processor manufacturer. In short, bringing McAfee under the Intel family tree as a wholly owned subsidiary will let Intel only further bridge the software-hardware gap.

The third pillar

Intel CEO Paul Otellini has since said that: ‘security has become the third pillar of computing after energy efficient performance and Internet connectivity’. Fighting words, but cyber crime, privacy and security threats are a concern for everybody, so who knows if he’s using foresight or blowing hot air. We’ll see shortly if Otellini’s call is correct.

The motivation

The way Intel sees things shaping up are in step with how we all see the mid-to-near future – most devices in the home will have some form of online connection and Intel wants to be at the centre of that. The company says acquiring McAfee ‘enables a combination of security software and hardware from one company to ultimately better protect consumers, corporations and governments as billions of devices – and the server and cloud networks that manage them – go online.’

Photo: Intel

Though the company has gotten off to a sluggish start in the smartphones industry, this Intel-McAfee merging is a sign that the chip processor giant is looking to creative ways for getting a foothold in the space.

Still, how will this work?

Curious onlookers, shareholders and analysts alike are wondering how this Intel acquisition is going to work. The Intel McAfee deal pits a software company with a hardware company in a union that makes little sense at the surface level. Intel makes processor chips, while McAfee makes security software.

Perhaps that there is what makes this such a masterstroke – that we don’t get it and Intel does. If not, this Intel acquisition could be ill-fated, and short-sighted, and doomed to fail even in this early stage.