I’ve had a few days to digest the acquisition of McAfee by Intel…and I still can’t figure out the “why” behind this acquisition. I’ve read several articles that state it’s for higher margins (which I get) and potentially faster chip performance (which I don’t). Maybe I’m missing something, but this looks simply like Intel grasping for a high margin leading edge software company. But unlike IBM, or even HP, Intel has always been a hardware company. No services organization to speak of. And these companies have little in common in terms of how their products are produced or even their location in the life cycle of a computer. Chips are more start up stream and McAfee is applied as part of the imaging process for some PCs or after market, as part of a consumer’s retail purchase.
I’m not saying this is a complete gamble, but I really can’t see clearly how they make any integrated value appear. Unless you embed more security code in the chip itself…which I’m sure is very likely for the bargain basement price of $7.7 billion for McAfee’s red. This reminds me more of the promised synergies during previous acquisition booms. Not nearly as complimentary as something like Dell with Perot or HP and EDS.
Can anyone else explain this to me?