Today, Intel Corp., the world’s largest chip maker, announced that it plans to acquire the security company, McAfee. Intel intends to pay 7.68 billion in cash, at $48 a share. This purchase is a big step for Intel.
Intel bounced back from the recession quickly and recently announced record sales. The chip company had a lot of money on hand (about $12.2 billion in cash), which is why it was able to buy McAfee. McAfee is not the only company that Intel has purchased recently. Last year, Intel bought Wind River to expand its presence in the consumer electronics market. McAfee gives Intel a presence in the antivirus software market.
Intel is relying on the growth of the security technology market so it can increase its power in that field. Intel wants to embed McAfee’s security technology into its chips. Now that Intel plans on buying McAfee, the chip company is a big player in the security software and services market.
Many analysts speculated about Intel’s intentions. Ashok Kumar, a technology analyst at Rodman & Renshaw, said, “Eventually the software features will get embedded in the hardware. So, maybe this is an expensive way for Intel to acquire domain expertise.”
Security is a growing concern for many businesses and Intel is looking to address these concerns. Paul Otellini is another analyst who also commented on Intel’s decision to purchase McAfee. Otellini said, “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. In the past, energy-efficient performance and connectivity have define computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.”
Intel already building security functions into its chips, but McAfee will expand Intel’s grasp immensely. Read more about both companies on their websites.
[Photo courtesy of Geeky Gadgets.]