Dear Intel, Here’s Why Selling Intel Security Would be a Huge Mistake

Summary Bullets:
• A rumored sale of its security business would be a major mistake for Intel.

• Intel Security has strong legacy products, promising new ones, winning leadership and strategy, and presents synergistic opportunities key to Intel’s future.

I’m not sure what surprised me more: Sunday’s Financial Times report that Intel was exploring a sale of its security division, or that industry observers and partners alike seem to be either indifferent or actually in favor of such a dramatic move.

Current Analysis believes a sale of Intel Security or its assets would be a mistake, for a variety of reasons. Here’s a brief look at the value Intel Security provides its parent:

Strong legacy product portfolio: I’ve questioned the continued viability of the aging McAfee brand, but revenue from the consumer products most tightly associated with it grew more than 10% last year, and the security telemetry Intel Security receives from residing on more than 100 million consumer devices also brings intangible value. On the enterprise side, its DLP, server security, and endpoint encryption products also enjoyed double-digit revenue growth in 2015.

Promising new products: Its focused its new launches on the strategic areas of endpoint, advanced threats, and cloud security with recent product debuts including the revamped Endpoint 10.X with a simplified interface, improved performance and better detection correlation; McAfee Active Response (MAR) for endpoint forensics and threat response; and File & Removable Media Protection, providing a wider variety of data encryption options to meet growing customer demand.

Leadership and strategy: Intel Security may have the industry’s boldest and savviest executive team in SVP and GM Chris Young, products VP Brian Dye, and CTO Steve Grobman. In 2015, Young announced the end-of-life for nearly a dozen underperforming products, revamped the entire engineering organization, oversaw the successful launch of a high-risk revamp of its endpoint security products, and with Data Exchange Layer and Threat Intelligence Exchange is positioning Intel as a leader in standardized security data sharing and product interoperability. Young has also doubled down on underperforming products like Web Protection and Enterprise Security Manager, bolstering product development resources to capitalize on offerings with promising portfolio synergy or potential for significant market share growth. When it clearly would have been easier to acquire EDR technology instead of building it from scratch, Young chose to build MAR internally with an eye toward full compatibility with TIE/DXL to foster strong third-party interoperability, recognizing that strategy as the best choice to foster MAR’s long-term growth.

Intel synergy: It’s critically important for Intel to increase revenue from next-generation technology areas like cloud computing, mobility, and smart connected devices, and Intel Security can help in all three of those areas. Its venerable ePO product is moving to the cloud and represents an opportunity to be at the apex of IoT device management, its upcoming cloud security roadmap includes powerful innovations few others can offer, and McAfee Labs is experimenting with emerging mobile security technologies.

There’s still work to be done, but the assertions that its McAfee acquisition was a failure simply aren’t accurate. Intel Security’s best days lie ahead, either as part of Intel, or for a wise, opportunistic suitor.



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