Intel, McAfee Deal Could Affect Microsoft Mobile Plans

Intel's $7.68 billion McAfee acquisition could have little direct effect on its relationship with Microsoft, unless Intel uses that deal as leverage to hurt ARM and attract Google into using its products.

Microsoft and Intel have a long-standing partnership. Microsoft Security Essentials competes with McAfee's portfolio of security products. So will Intel's $7.68 billion acquisition of McAfee affect the chip-maker's relationship with Microsoft?

Not really, said representatives from Intel.

"McAfee will be a wholly owned subsidiary, so there will be little change from today," an Intel spokesperson wrote in an Aug. 19 e-mail to eWEEK. "While McAfee does compete with Microsoft in some areas, Intel's Microsoft relationship is longstanding, extensive and strong, and very important to Intel."

As a subsidiary, McAfee will apparently report to Intel's Software and Services Group. In an Aug. 19 conference call with media and analysts, Intel executives suggested that the acquisition supports their view of security as an essential pillar of computing, along with energy-efficient performance and connectivity. In theory, the McAfee properties will also allow Intel to buttress its security flank as it expands into mobile and embedded devices.

"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," Paul Otellini, Intel president and CEO, wrote in an Aug. 19 statement ahead of the conference call.

"Intel's acquisition of McAfee signals a growing awareness among the industry, and in our society, of the importance of an enhanced level of security in everything we do," a Microsoft spokesperson wrote in an Aug. 19 email to eWEEK. "Microsoft has been investing heavily to build security and privacy into all of our software and services, and to deliver security solutions, such as Forefront for business and Microsoft Security Essentials for consumers."

Microsoft Security Essentials, available for free through the company's Website, is designed to combat both viruses and malware on Windows-equipped PCs. Originally codenamed Morro, Security Essentials was designed to replace Live OneCare, an antivirus product that failed to gain substantive market traction. While the software lacks some of the features present in higher-end offerings by security vendors such as McAfee, it does offer an alternative to lower-end products.

Analysts seemed to support the Intel's assertions about the acquisition-to a point.

"Intel is ramping up quickly in the security realm, as it correctly recognizes that devices are increasingly complex and connected and increasingly unsafe and secure," Jack Gold, an analyst with J. Gold Associates, wrote in an Aug. 19 e-mail to eWEEK. "Much of what they are doing is at the lower level-below the OS and into the chip level or BIOS level."

Microsoft, Gold added, "primarily plays in the end-user/consumer protection of Windows-based systems." Because of that, "I don't see this as having much impact on the Microsoft/Intel relationship. I see this more as Intel trying to expand its level of security enablement for business users, and ultimately to consumers as well."