‘McIntel’ Draws Sharp Critiques from Competitors

Head-scratching. That’s the best way to describe the surprise acquisition of security vendor McAfee by chipmaker Intel. Sure, an imminent McAfee had been perennial watercooler scuttlebutt for the past few years, but everyone – and I mean everyone – thought it would be Hewlett-Packard, Cisco, Microsoft or EMC.

The market reaction has been swift. Since Intel paid a premium, McAfee’s stock soared nearly 50 percent on the announced deal; Intel’s stock swooned slightly. Partners have been seeking answers as to what the acquisition means to them, and that prompted McAfee global channel chief Alex Thurber to post a blog that essentially said, “Move along, nothing to see here.” Actually, what he wrote was, “During the close process, it is important that we all maintain a business-as-usual mentality and focus on closing deals in the current quarter. McAfee will continue to strengthen its security focus and you have my commitment, along with Mike DeCesare and Dave DeWalt, that the channel is still a top priority at McAfee. We are devoted to driving growth through your organizations and you can count on our leadership for years to come.”

But business as usual isn’t what McAfee competitors are saying. Other security companies were swift in their critiques and condemnation of the Intel acquisition.

Websense is offering a 25 percent kicker to partners that register a competitive displacement deal. As Websense wrote to its partners, “McAfee has effectively ceded the content security market. Its customers will undoubtedly re-evaluate their investment, and they and other prospects will likely look first to the market leader, Websense. Our work now is to maximize this opportunity, working strategically together.”

Sophos issued a series of statements about the meaning behind McIntel, essentially pointing out that such mergers rarely work while reaffirming the company’s commitment to security and the channel.

Channel chief Chris Doggett said, “We’ve seen what happens to M&As between big companies in our space – they are no longer pure play security and this often results in a loss of focus, product lines being retired, and the disenfranchisement of their channel partners.  We hope that Intel is able to offer a different outcome for the channel, but that remains to be seen as the track record for such deals is poor.”

Sophos corporate strategist Arabella Hallawell wrote, “The Intel acquisition of McAfee will focus on embedded security into consumer-orientated hardware fabric, phones, ATMs, devices, etc. This will be a major distraction from their enterprise business, products and channel…It will shift McAfee product and commercial focus to embedded security versus its traditional software focus and servicing the needs of enterprise customers (i.e. [ePolicy Orchestrator], policy and threat focus for business customers). We believe this will most impact enterprise and business customers as the Intel focus will cause resources/attention to be allocated to hardware and embedded security of devices.”

While Adrian Turner, CEO of embedded security specialist Mocana, believes in the logic behind the deal, he doesn’t see where either Intel or McAfee have the DNA to transform their security technologies into market-ready products. In his blog, Turner wrote, “At Mocana, we believe that the security model for a device-dominated Internet needs to be fundamentally different from the networked-PC paradigm familiar to Intel and McAfee. It requires an entirely new architectural and philosophical approach to security. Today’s best-in-class approaches to securing smartphones and other smart devices simply aren’t architected to deal with emerging attack vectors.”

None of these McAfee competitors are wrong, but they’re not right either. Solution providers should be wary of any security vendor who claims that deals such as the Intel-McAfee Acquisition will cause distractions from products or channels. Likewise, claims that deals such as this will lead to a “lack of focus on security,” is simply ridiculous. Former NetApp CEO Dan Wormenhoven schooled me on this; every company is for sale and every executive has a fiduciary responsibility to consider all reasonable offers and how they may benefit shareholders/stakeholders. Sophos, Websense and scores more security companies would jump at the chance to be bought by a larger infrastructure vendor, given the chance and, of course, the right price.

In the wake of such deals, solution providers shouldn’t concern themselves with palace politics and the intrigues of court. Those are truly distractions. To expand upon my Wormenhoven lesson, solution providers have a fiduciary responsibility to themselves to explore all available sourcing options. What solution providers should do is assess the marketplace and technology landscape, and make partnership, product and service decisions that are best for their business and customers.