On 19th august 2010, Intel announced plans to acquire McAfee for nearly 7.7 billion, coming as a surprise to the tech industry that has failed to make a rational connection between the chip manufacturing hardware company naming the antivirus software company as its wholly owned subsidiary.

According to Dave DeWalt, president and CEO of McAfee, “The cyber threat landscape has changed dramatically over the past few years, with millions of new threats appearing every month. We believe this acquisition will result in our ability to deliver a safer, more secure and trusted Internet-enabled device experience.”

McAfee will continue their own product lines while reporting to Intel’s software and services group.

The Intel McAfee acquisition has created a mystery over both what the purpose behind the takeover was and what future does that predict for the products conceived by them. McAfee, founded in 1987, is a security technology company while Intel is a chip giant. Both are established brands and flourishing in their respective markets and together they hope to incorporate security into hardware, thus creating more reliable ‘ready made’ protected content available to clients.

“In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.” - Intel’s president and CEO Paul Otellin

Intel made a series of software purchases which is leading experts to believe that they are broadening their market in order to generate multiple streams of revenue. Acquisitions related to gaming, visual computing and machine software, cable modem product lines etc. This could be another move in a vertically oriented direction like IBM has done before it or Symantec, which acquired Verisign in August.

User concerns relate to whether the integrated anti virus software could be tuned or removed. Intel loyalists fear that such a deal could take the corporation into debt as people already have enough problems with their antivirus softwares functioning with the games and downloads without having AVSW in hardware, where it can’t be discarded and limits user choice. Bloggers warned that Intel should get ready to face potential anti-trust lawsuits in future, much like Microsoft did.

“If Intel starts releasing hardware which has an anti-virus suite tied up to it, it could block other companies from selling anti-virus software to work on those systems.” (Bit-tech.net)

Insiders have remarked over the overpriced deal, with some remarking that such an investment will dilute Intel’s focus and resources, thus losing its original customer base as well. However market analysts believe it is a move to penetrate the smart phone and other portable (tablets, notebooks) devices market, with a hardware accelerated security package before anyone else has made a move and herald a new era of secure technology, by reducing system load.

Intel has received a lot of criticism for pursuing a deal with McAfee, most of it directed at McAfee’s AVSW that is highly unsatisfactory, often termed a ‘system killer’ for slowing down processor speed. McAfee though has more to offer than its AV package. It provides hugely popular encryption software and enterprise firewall. Intel may be looking to make hybrid hardware with the data encryption and disposing off the AVSW division some where down the line.

As of now, European Union and US regulators have given their approval to Intel, after expressing initial concerns about any preferential treatment that may be meted out by Intel to McAfee, by locking their processors and chip sets to other security vendors. This move gives Intel significant advantage over AMD, its main competitor. Already Intel has announced plans for its new product line by the end of 2011.

“Hardware-enhanced security will lead to breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow,” said James. “This acquisition is consistent with our software and services strategy to deliver an outstanding computing experience in fast-growing business areas, especially around the move to wireless mobility.” Renée James, Intel senior vice president, and general manager of Intel software services group.