Cybersecurity businessCybersecurity giants adapt to changing cyberthreat landscape
McAfee and Symantec, the two technology giants of traditional firewall and antivirus protection software, are shifting their attention to focus more on cybersecurity challenges. A rapidly changing landscape for computer networks, in which data is transmitted and stored via mobile devices and cloud computing, has created demand for products and services that can secure information against state-sponsored or organized cyber terrorism.
McAfee and Symantec, the two technology giants of traditional firewall and antivirus protection software, are shifting their attention to focus more on cybersecurity challenges.
A rapidly changing landscape for computer networks, in which data is transmitted and stored via mobile devices and cloud computing, has created demand for products and services that can secure information against state-sponsored or organized cyber terrorism. On one side, technology giants like Hewlett-Packard and Cisco Systems see revenue opportunities in cybersecurity. On another side we see the emergence of start-ups funded by large venture capital.
“There has been intense interest in cybersecurity,” said Mike Fey, chief technology officer of McAfee. “And it keeps getting hotter every year. It’s definitely a boom, and we’re in the right place at the right time.”
The Los Angeles Times reports that Symantec and McAfee are adapting their businesses to maintain market share and capitalize on new opportunities. According to a report from Gartner, Symantec is the leading security provider, with 19.6 percent market share in 2012, and McAfee is second with 8.8 percent. Both firms have led the industry in security services for several years, but both have experienced reductions in market share since 2007.
“I think the legacy providers, the Symantec and McAfees, are kind of seeing that a lot of this is just not working against more sophisticated attacks,” said Phil Lieberman, chief executive of Lieberman Software and a 30-year veteran of the industry. “So there’s a new generation of companies being created to attack the problem.”
New opportunities in computer network security led to one of the largest cybersecurity deals when Intel purchased McAfee in 2011 for $7.6 billion. According to Fey, the change of ownership has provided McAfee the resources to adapt its core competencies to the changing world of cybersecurity.
TheTimes notes that the challenge for McAfee is to decide which areas of cybersecurity are best for the company to invest in. “We see tons of different opportunities, and we see tons of different businesses,” Fey said. “We have to limit ourselves to what we do best. We can’t diversify beyond our ability to deliver for the customer. The worst thing we can do is to diversify into so many areas that we don’t do anything well.” Due to the Intel acquisition and Intel’s broad research capabilities, McAfee has focused more on investing in in-house research and development rather than seeking external acquisitions. “That’s really different than who we were three years ago,” he said.
Nevertheless, McAfee is open to potential acquisitions. As the market expands for cybersecurity innovations, so do valuations, and McAfee would consider taking advantage of reasonable valuations. Intel’s acquisition of McAfee has offered little insight on McAfee’s financial performance, except that McAfee posted revenue of “more than $2 billion annually” on its Web site. McAfee also posted about $2 billion in revenue in 2010, the firm’s last year as a public company. Symantec hired former Intuit CEO Steve Bennett to be its new chief executive just eighteen months ago. Bennett has created a new strategic plan and recruited new executives.
