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Fear as motivator: why Intel acquired McAfee

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When asked the question that was on eveyone's mind — namely, why go all-out and buy McAfee rather than merely partner with them? — Otellini had two answers at the ready. "One, that having a deeper collaboration, where we could look long term and try to look at the combination, the deeply-integrated combination of hardware and software capabilities, would add substantial value to our platforms and differentiation to our platforms.

"Number two, it became pretty clear to us that the value of that offering was fairly significant, and it made sense from a financial perspective to have that value accrue to Intel shareholders." Translation: we think we can eventually make a pile of money off this deal.

We're betting that Intel will need to spend a pile to earn that pile — a pile of marketing money, that is. McAfee is not exactly a beloved name among IT sales-influencers, but Intel remains a trusted brand among consumers.

And we're also willing to bet that Intel will use that brand power to first heighten fears of users of mobile devices that the soon-to-be-all-things-to-all-men cloud is replete with threats, and then assure them that a mobile device with Intel Inside™ is their best defense against what Otellini described as "the [growing] sophistication and frequency of security attacks against individual consumers."

James also beat the cloud-danger drum, saying: "Security is top of mind for consumers, and knowing that your PC, your smart phone or your Internet-connected device is securely connected to the network and to the world can change how useful that device really is."

DeWalt was almost gleeful about his company's "services and solutions covering endpoint security, network security and cloud security," noting: "With the explosion of new IP-connected devices and continued growth in the threat landscape, our opportunity has expanded dramatically and our strategy is paying off."

Don't get us wrong, we're not dissing security — it's an authentic need, and threats from miscreants, ne'er-do-wells, and evildoers are all too real. IT pros know this, but as the mobile marketplace has heated up, consumers are only now coming around to the fact that their pocket-able devices are also vulnerable — and as those devices become repositories of not only contacts and calendars but also of financial information and charge-card powers, a focus on security is a smart marketing strategy.

And it's a strategy that Intel could use to secure an advantage in its competition against such current mobile-processor market leaders as ARM. Your average consumer has no freaking idea what powers their handheld — ARM has essentially no brand presence. Intel spent approximately eleventy squillion dollars on its Intel Inside™ PC campaign, and that branding has a resonance that the company can extend to the mobile marketplace.

And not to put too fine a point on it, but Intel's mobile-processor offerings are not exactly flooding the market. As we noted on Monday when Intel acquired another primarily consumer-level group, TI's cable-modem team, Chipzilla's Menlow mobile platform was a bust, the jury is still out on that beknighted platform's follow-on, Moorestown, and the company's first platform that has a real shot at handheld victory, Medfield, won't see the light of day until next year.

And before Medfield arrives, the ARM army — VIA, Qualcomm, Apple, and the rest — won't be standing still. Intel needs a differentiator. And it may have just bought one.

Also, Otellini is likely not blowing smoke when he says. "Everywhere we sell a microprocessor, there's an opportunity for a security software sale" — and by software, we're assuming he was referring to firmware, in-chip code, and bits and bytes on an installation disc. No matter what the delivery method, Intel may very well also build hardware-assisted security into its IT-level parts.

But the mass-market future is mobile and embedded, and that's where a well-crafted marketing plan could sway users into equating Intel with security. There are, of course, a veritable minefield of "ifs" to navigate, but don't put it past Intel to pull it off.

It's all about creating a perception in the minds of millions of consumers that the cloud is a scary place — a scenario, as we noted, that Intel went out of its way to promote in Thursday's webcast — and that big, powerful, secure Chipzilla can be those consumers' protector.

And although Otellini says that "Intel is giving its commitment to the McAfee brand," we wonder how far that commitment will reach after the planned acquisition clears its regulatory hurdles and McAfee in subsumed deep into the Intel fold.

That said, Intel's acquisition history, it can be argued, isn't firmly on their side. Previous acquisition binges — such as the 25 companies the company borged during the go-go dot-com years of 1999 and 2000 — that have taken Chipzilla away from the "Chip" focus of its core competency haven't exactly produced rousing successes. "Softzilla", we aver, simply doesn't sound right.

But times have changed. We believe that Otellini was right when he told those investors back in 2009 that the company's "growth opportunity" was in small stuff. It remains to be seen if the McAfee acquisition — by far the largest acquisition in SoftChipzilla's history — can help secure Intel's relevancy in the mobile marketplace. ®

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