Will McAfee turn Intel inside out?
The following is a guest post by Robert Cringely, who has been writing about technology since 1987 and blogging since 1997. His work can be read at his blog. The views expressed are his own.
Intel, the world’s largest semiconductor company, announced this morning that it is buying McAfee Associates, a data security software company, for $7.68 billion — Intel’s largest acquisition ever. Why would Intel do such a thing? The company is on a roll with gross profit margins over 60 percent, more than 80 percent market share, and banking in excess of $1 billion per month in profit. So, why mess around with software? Because Intel’s semiconductor business is as big as it can get, literally, and it has to find a use for all that cash.
Two weeks ago Intel settled a long-standing anti-trust dispute with the U.S. Federal Trade Commission. The terms of that settlement, which involved no fine or payment by Intel, came down to the company agreeing to mind its manners and not work too hard to hurts its major competitors, companies like Advanced Micro Devices (AMD) and NVIDIA. In practical terms, that means putting the brakes on certain internal Intel programs intended to crush those companies which are now protected.
Since it can’t grow much more in semiconductors, having maxed-out its market share and set records for profit margins, Intel has to expand into businesses where it isn’t considered a potential monopolist. Software appeals because it, too, has inherently high gross margins and, theoretically, won’t put a drag on Intel earnings.
Data security software in particular is attractive to Intel which sees its future very much tied to Internet services and Internet services dependent on data security. Intel wants to own both the chicken AND the egg.
McAfee has a storied name but a troubled history and offers obvious opportunities for Intel to apply both economies of scale and its often admired management culture. With Microsoft seemingly receding from the paid data security market, there would seem, too, to be opportunities for growth there. McAfee’s main competitor, Symantec, is very aggressive and determined, but that just makes for good competition in what looks like it will come down to a two-horse race.
Having fought for years against AMD, Intel thinks it knows all about two-horse races. As such, we can look for Intel to integrate certain portions of McAfee security software directly into Intel chips, making them arguably more secure. Software or no, remember that with Intel it always comes down to the chips.
from Commentaries:
Apple-Google learn Corporate Governance 1.0
LONDON, Aug 3 (Reuters) - The resignation of Google CEO Eric Schmidt from Apple's board should come as no surprise to anyone with an inkling of what corporate governance means.
But then Silicon Valley's idea of corporate boards has long consisted of cozy, interlocking directorships which would be considered collusion in most other industries.
Google's CEO is not leaving Apple's board voluntarily. He is only stepping down in response to the increased government scrutiny of obvious potential conflicts of interest between the two companies.
Yet regulators shouldn't be content with Schmidt's departure. The truth is that Apple and Google have been heading into the same markets for years. A veritable chain of overlapping business ties remain in place even if the most obvious formal link is now broken.
The chairman of Apple's board, former Genentech CEO Art Levinson, remains on Google's board. Another Google board member, Ann Mather, is the former chief financial officer of Steve Jobs' former animation company, Pixar Studios.
Paul Otellini, the CEO of Intel Corp, Apple's main chip supplier, also sits on Google's board. Al Gore remains on Apple's board, but in his new turn as venture capitalist he has many business ties to Google and its founders. Gore is a partner of Google board member John Doerr at legendary Silicon Valley VC firm Kleiner Perkins.
For months, the U.S. Federal Trade Commission has been examining Schmidt's participation on the boards of the tech world's two most dynamic companies. Last week, the Federal Communications Commission said it was looking into Apple's decision to reject a Google phone application to run on the iPhone.
This reader generally finds Eric Auchard easier to follow than in the present article, which ought to be interesting, but in my opinion leaves much room for confusion.
Is the point here that Apple and Google are not competing sufficiently against one another, or that they’re competing too much and if so, how could this possibly be the case? Frankly, I’d like to see them compete more rather than less, but it’s really hard to tell from what has been written here whether they do and what makes them any worse than [insert long list of major U.S., corporations here].
In passing, would it not be appropriate also to actively question the debilitating role in post-IPO terms that VC can and too often does exert upon emerging industries, by dictating terms of policy and players involved? There’s more than a smattering of governance ethics needing dealt out and enforced in the entire business sphere of so-called Venture Capital, and has been for over a decade. Which brings us to the present.
Corporate governance – or lack thereof – would be a fundamental topic of immense importance if properly argued across the board in American [for lack of a better word] industry.
I for one would like to see corporate cartel considerations scrutinized more closely in general, rendered transparent, (within reason) enforceable and, particularly in this case, put in better perspective before concluding the debate.
China’s Web filtering starts in the West
– Eric Auchard is a Reuters columnist. The views expressed are his own –
The Chinese government has backed away from mandating filtering software on all personal computers in China, in a move that averts a dangerous escalation in its censorship powers.
But however controversial and unworkable China’s plan to require Internet filters on PCs proved to be, Western firms have largely themselves to blame for creating and selling such filters in the first place.
The danger rears its head whenever technology created to solve some specific security problem is put to new and unintended use, not just in repressive regimes like China, Iran or Saudi Arabia, but professed freedom-loving countries in Europe or the USA.
“What is good and what is evil?” asks Mikko Hypponen, chief research officer at Finnish anti-virus software company F-Secure Corp. “It is really a very basic problem that security people face.”
A computer password cracker in the wrong hands is considered malicious, of course. But corporate network administrators rely on the same tools to recover lost documents when employees forget computer passwords. Voice recognition software used in corporate call centres to automate and improve customer service can be used by police to wiretap suspects on a grand scale.
On Tuesday, China’s official news agency reported that a government ministry had abruptly backed down from requiring that every PC sold in China include a censorship program called “Green Dam-Youth Escort”.
So… because the Internet exists, so does the security censoring software tools required to censor the porn and malicious code… therefore, the Internet shouldn’t have been built…. right? It’s all our (the West’s ) fault. What a ridiculous article. Anybody with a brain knows that with great power comes great responsibility — just ask Spiderman. The real issue here is the cowardly Chinese government who can’t be faced with their own corruption and power-hungry dweebs, so they do whatever they can to “save face” and stop any possible route for political progress or taking responsibility. The “porn” blocking is merely a front they hoped the rest of the world would accept as reasonable — that’s why they stole the code — they didn’t write that part, they wrote the part which spies on their own people in order to squash anything threatening their comfortable nation-robbing lifestyles.
Stupid acquisition. Microsoft has a free virus protector that works just as good