Intel Pivots Its Cybersecurity Play Spinning Off McAfee As A $4.2B Standalone Company

Intel has sold more than half of its stake in McAfee, the security outfit it acquired in 2010 for $7.68 billion, and will not support the brand as a standalone company. The deal makes McAfee one of the largest pure-play cybersecurity firms in the world. Upon closing the transaction, McAfee CEO Christopher D. Young wrote an open letter to Intel Security's stakeholders expressing optimism for the company's future.

"Today, a new McAfee is born," Young wrote. "One that promises customers cybersecurity outcomes, not fragmented products. One that vows to move this industry forward by working with competitors, not just partners. And, one that offers employees a calling, not simply a career."

"Today is the first day of a new future, one we share together. Because, together is strong. Together is better. Together is power," Young added.


When Intel purchased McAfee several years ago, it had grand plans of implementing the company's antivirus technology into its processors to offer consumers better protection at the hardware level. Those plans never really panned out, and McAfee eventually ended up being rebranded as Intel Security. In the first half of 2016, Intel Security grew its revenue 11 percent to $1.1 billion, while operating income grew 391 percent to $182.

Despite some promising financial figures, it was reported in June of last year that Intel was pondering a sale of its cybersecurity division. That has now come to fruition, though rather than selling McAfee outright, it sold a 51 percent stake to TPG, a technology investment firm. Intel retains a 49 percent stake in the company and will continue to provide support and access to its resources, including "significant financial, operational, and technology."

"We offer Chris Young and the McAfee team our full support as they establish themselves as one of the largest pure-play cybersecurity companies in the industry," said Brian Krzanich, Intel CEO. "Security remains important to Intel, and in addition to our equity position and ongoing collaboration with McAfee, Intel will continue to integrate industry-leading security and privacy capabilities in our products from the cloud to billions of smart, connected computing devices."

Intel hasn't given up on its hardware approach to security. The chipmaker predicts that by 2020, there will be 200 billion smart objects comprising the fast-growing Internet of Things sector. Intel sees new challenges playing out in IoT security and feels that its hardware-based approach can better security every layer of the compute stack than the current software strategy that AV companies employ.