Defense Media Network

Intel Corp. Tackles Cybersecurity With McAfee Purchase

Intel Corp.’s recent $7.7 billion purchase of McAfee Inc. rapidly moves the world’s largest semiconductor company into a federal business considered nearly immune from Obama administration defense budget cuts: cybersecurity.

Indeed, the acquisition comes with a growing realization that computer networks for the Pentagon and intelligence agencies face thousands of attacks per year, many of them originating from arch-rival China, federal computer experts say.

Perhaps that explains why the computer security firm has registered 16 consecutive quarters of double-digit sales gains. Last year, McAfee brought in a record $1.93 billion with earnings of $118.2, which translates into a five-year profit gain of 50 percent.

Observers note the Intel-McAfee merger comes amid two seemingly contradictory trends – high profile moves by hardware vendors into defense software and services and a recent decision by the White House to slow the pace of several major information technology projects worth up to $50 billion.

However, Obama has personally pledged to support cybersecurity as a linchpin to protecting the United States against theft of sensitive data as well as keeping an adversary from knocking out critical computer networks before launching an attack.

Estimates on how much the government spends on cybersecurity range from roughly $2 billion to $8 billion a year, with spending expected to increase from 5 percent to 8 percent annually over the next several years.

Getting an exact figure remains difficult, because cybersecurity spans a wide range of activities across multiple civilian, defense and intelligence agencies.

For their part, McAfee senior executives say the United States in recent years has undergone an “exponential” increase in the number of attacks. They define attacks not necessarily as the number of actual or attempted hacks but in terms of the amount of “malware,” short for malicious software designed to infect and damage computers.

McAfee executives report sampling some 34 million pieces of malware last year. That translates into roughly 47,000 pieces of such malicious code as trojan horses and viruses per day that are sent via email, delivered through USB drives or through a telephone line connected to the Internet.

Company officials don’t reveal dollar revenue or the percentage of their sales to the federal government. However, they note major corporations and government agencies account for 60 percent of sales, with those to defense and intelligence escalating by more than 1,000 percent in the past five years.

Moreover, McAfee plays a critical role in a key security program for the Pentagon known as the Host-Based Security Solution (HBSS). The Defense Information Systems Agency says it is administering the program at the behest of the U.S. Strategic Command.

Dave DeWalt, who served as McAfee’s CEO prior to the merger agreement, has said his company’s involvement in HBSS includes providing anti-virus protection, encryption and data-loss prevention and preventing host intrusion.

Under DeWalt, McAfee moved heavily into an Internet-based realm known as “cloud” computing. McAfee’s cloud-based computer security system allows users to query the database to determine if anything from an email to a mobile phone has been infected.

A little more than a year ago, the company, which operates in 110 countries, received roughly 1 million database queries a day. That figure now stands in excess of 4 billion, McAfee officials say, underscoring the enormous global concern for computer security.


Michael A. Robinson has written articles for some of the nation's more prestigious publications. As...