Opinion Intel is reportedly looking to offload its Intel Security arm.
The IT giant is investigating options for Intel Security cyber security business, the FT reports. These options include selling off the security software business formerly known as McAfee that the chip-maker bought for $7.7bn back in August 2010. Intel is yet to comment on reports that it is in talks with its bankers about its security business.
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Private equity funds have recently been receptive to the idea of buying into or investing in cyber security firms thanks to a combination of growth prospects for the future related to growing security threats and strong cash flows in the here and now.
Bain Capital recently sold Blue Coat Systems to Symantec for $4.65bn or almost twice the $2.4bn it paid for the more than occasionally controversial network security and performance optimisation firm last year. The Blue Coat example provides no assurance of repeat success elsewhere and the suspicion is that fundraising and the prospect for a quick turnaround sale right now are poorer than they were either last year or the year before. The market may have peaked or at least flattened out.
In any case, the sale of Intel Security would represent the biggest security business sale to date, so it might take a consortium of private equity backers to support.
Intel as a whole has been hard hit by the declining PC market. Recently the IT giant announced plans to shed 12,000 jobs as part of plans to refocus its business around chips for cloud computing.
When it bought McAfee back in 2010, the plan was to embed cyber-security functionality into chips. At the time Intel bosses said they wanted to make security a third pillar of computing alongside energy efficiency and connectivity.
Intel planned to embed security in a much greater range of devices - everything from smartphones to TVs and cash machines. The McAfee business it bought was split between consumer and enterprise security software and translating competencies into something that offered security in hardware and at level of chips and components was always going to be a big ask. Irrespective of how technically brilliant Intel’s engineers were a shift in the security eco-system needed to happen to make the plan live.
Detractors - and there were many even in the immediate aftermath of the deal - argued that Intel paid an awful lot for a company with no obvious core chip-making synergy.
In any case, Intel’s strategy never really came to fruition, partly because the shift to mobility and cloud computing as well as changes in the threat landscape (APTs, Snowden-inspired enterprise confidentiality concerns etc). Security Internet of Things devices alongside Big Data analytics in the enterprise have become cyber security hotspots. ®