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Comment by cryptoz | Hacker News Reader

Why would they do this? It seemed obvious to me than in 5-10 years Antivirus software would be obsolete and unnecessary. I hear people every day recommending Windows 7 users get Microsoft Security Essentials and nothing else. And personally I run Ubuntu, so I haven't thought about antivirus software in years...

This seems like a very odd decision to me. Intel, a world leader in processor design, does not need to get into such a sleazy business as antivirus software.

Why not spend that $7.7 billion helping the world write better code?

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McAfee do more than just desktop antivirus: for example, they have mobile, virtualisation and network security products. see products by category here: http://www.mcafee.com/uk/enterprise/index.html

Intel has a large interest in mobile, virtualisation and network arenas; this isn't really as surprising as you make out.

McAfee also has strong UI programming expertise that Intel sorely needed. Intel's IPP and MKL libraries are absolutely great, but VTune looks like it is fresh out of 2002. They get access to several stable revenue streams (like antivirus), and can cherry-pick talent to work on whatever projects they want. There aren't many downsides for Intel.

We're talking about $7.7 billion. I'm not sure it's quite as rosy a picture as you paint. I'm not that familiar with McAfee's annual profits, but even if they make $500 million a year, we can value the talent they cherry-pick at an absurdly high value of $1 billion, and it would still take Intel well over 10 years to recoup the investment, assuming stable revenue streams.

$173 million in 2009, up from $172 in 2008 and $166 in 2007. It seems odd to make an assumption when the real answer is seconds away!

Thanks, I was about to head into a meeting and didn't have time to do the research. Assuming $175 million in profits per year, that means 44 years to breakeven, ignoring the talent acquisition angle. How much are 20 (or even 50) good programmers worth?

http://online.wsj.com/article/SB1000142405274870447610457543...

Intel's stock only took a small dip, and it looks like some of those who left were shifting it to McAfee to ride the wave as the stock went up.

That's a lot of investors in an otherwise volatile market not jumping ship, so they must see something good in the deal that we're missing.

Either that, or stock market prices are much less connected to business fundamentals than one would hope.

Small dip??? Intel lost $3.5 billion in market cap on the news. McAfee gained $2.6 billion.

$3.5b is a big number, but it's only 3% of their market cap.

http://www.google.com/finance?client=ob&q=NASDAQ:INTC

Several other companies in that market went down a similar amount, so it doesn't seem to be extraordinary. I would expect a lot of tech investors to move their money to McAffe after that announcement hoping to get something out of it.

What matters is what happens after now. If it continues to go down for a long time, it might be a problem.

They would be ecstatic with that kind of return. Without growth and still making a hefty return. McAfee has ~$2b in revenue but an operating income of "just" $221m.

A simplified perpetuity of $175m @ 6% would have a PV of ~= 3b. I'm having trouble seeing how they'd ever break even based on profits alone. I just can't imagine what kind of integration with existing products they think will add another 4.7b.

6% seems a little high given the current climate, no? Take that down to 3% and you're in the neighborhood of the deal price.

Still not sure if I agree with the deal, and it does seem driven by a bunch of cash burning a hole in Intel's pocket.

$7.7Bn is a lot of UI programming expertise... As in, how many salary/years is that at market rates?

7.7 Billion dollars for UI design?

It seems strange that Intel is investing in this particular sector that leverages mostly Windows stuff. They should move out of Steve Ballmer's basement and make their own OS.

Why do they want to make software for platforms when their competencies are on hardware?

One that doesn't look like a antivirus program for Windows.

I don't really get how you can write:

"They should move out of Steve Ballmer's basement and make their own OS." and "Why do they want to make software for platforms when their competencies are on hardware?" at the same time.

They're leapfrogging to a niche market of going from hardware to security on the Windows platform. What's the gain in getting into an specific platform's flaws (antivirus) and development environment? That's the corner of the platform itself, not to mention the scope of the OS industry.

If they want to do software, they should develop a OS, maybe for Atom or some kind of mobile platform or otherwise.

Antivirus is back and to the left.

> If they want to do software, they should develop a OS,

> maybe for Atom or some kind of mobile platform or otherwise.

I believe that's MeeGo (http://meego.com/).

My bullet points are just pointing out some icing on the cake that comes with the deal.

"Why do they want to make software for platforms when their competencies are on hardware?"

Vendor lock-in and community are just as helpful for Intel as they are for other businesses. If they can grease the wheels for their primary business (even at a small loss), then it's not necessarily a bad idea.

They should move out of Steve Ballmer's basement and make their own OS.

Yeah, that won't have antitrust implications, or anything.

Would it? I don't think so. Which part of the antitrust laws would that violate?

http://en.wikipedia.org/wiki/United_States_antitrust_law

Are you kidding me? McAfee creates great UIs? Since when?

Intel decided to do a public good, and plans to remove all McAfee antivirus software from the planet.

Is McAfee really that bad?

After buying Secure Computing and then discontinuing the SnapGear I know I'm not terribly happy with them.

Snap Gear was awesome. Used an SG565 for some research we were doing. Best wireless router/UTM I have ever owned.

Disclosure: Used to work for Secure Computing, but not the snapgear division.

In April they issued an update that accidentally targeted legitimate Windows system files, causing the updated boxes to bluescreen. Astounding enterprise-level incompetence.

That might be excusable once (not really), but the problem is they do it every 3 months. Seriously, stay away from this stuff.

From what I've heard, Intel HQ was hit by this as well.

maybe they weighed their options, and found that buying the company straight for 7 billion is cheaper than suffering through more downtime caused by McAfee software.

Oh yeah, McAFee has given blue screen to me many times. I bought Dell laptop for me and my gf. After McAFee free one year subscription expired, we decided to move to different anti virus. Once we uninstalled McAfee, both of our laptops got blue screens and crashed. My friend also had same experience with two of his computers.

This happened to me too just this past week; the only resolution was a full system restore. Pretty shocking.

McAfee is a resource hog.

I'm definitely biased as a MS employee, but I can't underscore enough MSE as an Antivirus solution - it's the least annoying AV on the market and has the least perf impact on your system. Literally, you install it and it only bothers you when it absolutely has to.

100% agreed. I don't work for MS but I honestly didn't run av software at all until MSE. It's the Google Chrome of AV software.

can you convince my workplace to dump Symantec and start using MSE?

Probably not; sane people dropped Symantec around the time when norton 2000 came out.

Well what worries me is mostly "what's going to happen to my job now?" I'm not some higher-up so... outlook isn't great. I've seen enough mergers to know how that usually goes.

So! I'm officially bad luck with businesses (was around just as CompUSA got liquidated, now McAfee acquisition), anyone wanna hire an MIS major with a burning desire to learn stuff solely for the sake of learning?

But in all seriousness, I've been speculating over the reasoning behind Intel doing this, and haven't come to many conclusions. As some others here have stated, McAfee actually has quite comprehensive network security (I've obviously seen the network layouts / architectures), etc, and maybe Intel just wants to try and market that?

I have yet to come up with a good reason - they are pretty disparate companies from what I can tell. There are "some" common grounds, but not many.

My guess is that they will be able to use their existing OEM relationships to push for McAfee to be installed by default (and paid for, not just a trial) on more and more computers.

McAfee also seems to be moving into different areas of computer security lately (PCI scans, etc), so it's not just anti-virus. I am not sure what % of their business this is though.

I thought unwanted default installs are the only way McAfee ends up on computers anyway.

If that's what it's called when network admins put on their default build images, then yes.

And corporate sales (writing this from a corporate PC with McAfee installed).

At least it's not obnoxious.

but it does bring a machine to its knees compared to the Microsoft Security Essentials product

Is McAfee really worthier than Sun? If IBM took a deal with Sun at that high, the Sun would have moved around the earth and Oracle doesn't stand a chance to slur the OS community!

Google != OS community

I work at a small antivirus company. I'd be interested in knowing how helping people whose computers are infected get them uninfected is a "sleazy business".

Last week I spent two solid days rebuilding from scratch my mom's PC from it's OEM Windows XP Home installation after some hostage type malware managed to defeat it's not quite state of the art defenses (e.g. AVG). You aren't doing anything sleazy at all assuming your stuff is really good (that includes your not working for AVG :-).

You're probably encountering one of those hard to shake off guilt-by-association theories, and working in the field, I'd be surprised if you are genuinely unaware of it.

To most people, computer security is a mystery box inhabited by criminals who try and break in, and Mafia-like organizations who offer protection for a fee.

Maybe McAfee has a patent portfolio that Intel fancies some use for?

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