Chipmaker Intel Thursday announced a $7.68 billion bid to buy computer security company McAfee, a huge bid to secure the "internet of things" -- the billions of chips in connected devices beyond computers.
Intel is the dominant player in traditional computers but the action is moving far away from the desktop, and even from computers in the traditional sense. Now the opportunities are not only in smartphones and tablets but in cars, TVs, ATMs, sensor networks, and medical devices: places and devices where we are just as exposed but have less personal control.
This is a huge growth industry for chip makers, and providing an integrated security layer could make Intel more competitive and trusted among enterprise customers deploying these systems en masse in the next few years.
Intel's not the only hardware company to start snapping up security companies. Only two days ago HP said it would acquire Fortify, an enterprise security firm. As reported by Computerworld, EMC purchased RSA in 2006, and IBM has bought from Rational, Ounce Labs and WatchFire in recent years.
"With the rapid expansion of growth across a vast array of internet-connected devices, more and more of the elements of our lives have moved online," said Intel president and CEO Paul Otellini during the announcement. Today's security software for cellphones, televisions and other connected devices leaves much to be desired, he said.
Otellini also said that "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."
"We have lots of activities going on in growing connected devices ... from connected television to mobile devices," Intel software and services chief Renee James told Reuters. "As we look at the businesses we're in, we see that security is the No. 1 purchase consideration. We believe that we can enhance security with hardware and come up with a better solution."
Not everyone sees this quite this way, which may explain why Intel's stock declined slightly on the news.
"I'm baffled," Peter Firstbrook, an analyst with Gartner in Stamford, Conn., told Computerworld. "I don't see any synergy at all between McAfee and Intel."
The boards of both companies will likely approve the acquisition, according to Intel, and regardless of its reasons, Intel wants McAfee very badly indeed. The company offered 60 percent more than McAfee stock cost when the stock market closed on Wednesday, causing McAfee shares to rise 58 percent in early morning Thursday trading in anticipation of the deal.
Photo courtesy of Flickr/Brad Friedman
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