Mcafee Case

As a leading security technology company, Mcfee offers computer and network solutions to businesses, consumers and governments. It operated in a single segment, and hence the role of the corporate parent is primarily setting strategic goals and ease access to capital market. According to Datamonitor, its offering falls into the following product groups: endpoint security, network security and risk & compliance.

From a corporate strategy point of view, at the end of 2009, INTEL was the world’s largest semiconductor chip maker, based on revenue. Its business was to develop advanced integrated digital technology products, primarily integrated circuits (semiconductors and switches), for industries such as computing and communications. They had also started to develop platforms, which were integrated suites of digital computing technologies that work together to provide an optimized computing solution compared to components that are used separately. Their goal was to be the preeminent provider of semiconductor chips and platforms for the worldwide digital economy.

Mcafee organized its business around its major product groups:[1] • | Endpoint security. Secure corporate and consumer computer systems, including servers, desktop and laptop computers, handheld voice and data phones, and other devices that are connected to corporate systems and networks and home PCs. This group comprises system security productsand data protection products. | • | Network security. Similar to endpoint security but are tailored protect network systems, servers, laptops and other network devices as well as users and data of corporate networks of all sizes. This group encompasses enterprise-class firewall, intrusion detection and prevention, network access control, network behavior analysis, network threat response, web, e-mail and data loss prevention security appliances and solutions. The offering also includes McAfee SECURE standard, an aggregate of industry best practices, separate from the Payment Card Industry (PCI) Data Security Standard, designed to provide a level of security that an online merchant can reasonably achieve to help provide consumers with better protection when interacting with websites and shopping online. McAfee’s network solutions also available as security software-as-a-service (SaaS) offerings and includes e-mail security service and web protection service. | • | The compliance and availability solutions. The C&A solutions include change control, application control, policy auditor and PCI compliance. The solutions assess, monitor, enforce and report on customer information technology (IT) policies in order to give customers both a real-time view of their governance and compliance profiles as well as continuous control of those configurations and policies to prevent unwanted or unauthorized changes. |

From a business strategy point of view, Software and Services business division, though part of Intel’s strategy, was not the focus of the organization previously. But in 2009, they were starting to get focus due to its move towards providing platforms to the user, than just components. Its initial offering included operating systems, middleware, and tools used to develop, run, and manage a variety of enterprise, consumer, embedded, and handheld devices. It was more targeted towards increasing the appeal of the hardware to the 3rd part software developer.

As evident in the 10-K filing (2010), Intel was transforming from a company with a primary focus on the design and manufacture of semiconductor chips for PCs and servers to a computing company that delivers complete solutions in the form of hardware and software platforms and supporting services. So much so that they changed their software business division’s strategy to be centred around three pillars of computing: energy-efficient performance, connectivity, and security.

Energy efficient performance was covered by the existing product suit, Connectivity would be provided by the acquisition of Wireless Solutions (WLS) business of Infineon Technologies AG (WLS business will operate as Intel Mobile Communications and offer mobile phone components such as baseband processors, radio frequency transceivers, and power management chips) and Security will be provided by their potential acquisition of McAfee.

[1] Datamonitor – Mcafee profile