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.”
Other analysts agree that the Intel-McAfee deal will have its biggest impact on the mobile space, where Microsoft is only beginning to renew its presence through initiatives such as Windows Phone 7 and Windows 7-equipped tablet PCs.
“The rise of tablets and mobile phone-based computing will bring with it increased demand for software intelligence that is embedded at the hardware level,” Alan B. Krans, an analyst with Technology Business Research, wrote in an Aug. 19 research note. “All security vendors have recognized and responded in some way to the mobile computing security threat, but offerings are not currently prevalent in the market.”
The demand for mobile security, Krans wrote, will only increase in coming months and years. “Intel’s acquisition of McAfee may not have a profound impact in the PC market, but could allow both Intel and McAfee to benefit significantly from rising demand for embedded mobile security that has a minimal impact on device performance.”
In February, Nokia and Intel announced MeeGo, a Linux-based software platform that supports multiple hardware architectures across multiple platforms, including phones, tables, netbooks, Web-connected televisions and in-vehicle infotainment systems. According to one analyst, Intel’s McAfee acquisition stands to affect the MeeGo initiative in significant ways.
“My expectation is that this [acquisition] will be more focused on MeeGo, as the smartphone platforms are very vulnerable to viruses,” Rob Enderle, principal analyst of the Enderle Group, wrote in an Aug. 19 e-mail to eWEEK. “Intel is moving to assure that MeeGo has a security advantage in a hostile world and can stand out sharply against the alternatives. They will also likely use this to help differentiate other offerings and rewrite the code to best take advantage of Intel’s architecture.”
According to Enderle, this is where the acquisition could alter Intel’s competitive profile with regard to not only other security companies and processor vendors, but also Microsoft: “While AMD will be hit, the primary target is ARM. Microsoft will likely see this as a threat to Windows Phone 7 but Intel is already at odds with them there and Microsoft is more concerned with Apple and Google.”
In July, Microsoft signed an agreement with ARM to extend the two companies’ relationship. “Microsoft is an important member of the ARM ecosystem, and has been for many years,” ARM CTO Mike Muller wrote in a July 23 statement. “With this architecture license, Microsoft will be at the forefront of applying and working with ARM technology in concert with a broad range of businesses addressing multiple application areas.”
That statement offered no specific details about the agreement, but a number of analysts and pundits suspected that the “multiple application areas” could include tablets and smartphones-areas of substantial interest to Intel as well as companies such as Hewlet-Packard, Lenovo and Google.
Indeed, some analysts see Intel’s McAfee acquisition as potential leverage in the chip-maker cementing a deal with Google. “I would expect Intel to lay this solution on top of Android for Atom,” Enderle added, “to help motivate Google toward Intel technology for that platform and the Chrome OS as well.”
In other words, the Intel-Microsoft relationship may undergo little direct change in the wake of the McAfee acquisition; but should Intel leverage that deal in order to compete against ARM, and attract Google, it could potentially affect Microsoft in more far-flung ways.
Editor’s Note: This story has been updated with a comment from Microsoft.