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6/12/2007
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McAfee CEO Optimistic About Tackling Security Complexity

McAfee's new chief said growth will come from selling suites of security products and services, particularly those that address security risk management, rather than individual products and services.

As security customers clamor for help managing the complexity of the technology they're being offered to defend themselves against network attacks, insider threats, and malware, McAfee's new chief Tuesday at the company's analyst event in New York laid out McAfee's response. McAfee's strategy for growth will come from selling suites of security products and services, particularly those that address security risk management, rather than individual products and services, said president and CEO David DeWalt.

Security risk management includes threat detection and prevention as well as regulatory compliance, added DeWalt, who joined McAfee as president and CEO on April 2, replacing interim chief Dale Fuller. DeWalt had most recently been executive VP and president of customer operations for EMC. Prior to that, he was president of the EMC Software Group, having joined EMC in 2003 as part of its Documentum acquisition.

McAfee has been building up its vulnerability and risk-management offerings in recent years through the acquisitions of vulnerability management vendor Foundstone in 2004 and security risk-management system provider Preventsys last year. The company's ePolicy Orchestrator centralized policy enforcement and reporting tool is also part of this strategy.

On Monday, McAfee introduced Version 4.0 of ePolicy Orchestrator, which promises to improve the product through Web-based controls, configurable reports that can be scheduled and e-mailed, and changes to its network and system security reporting features. Looking ahead, McAfee plans to expand ePolicy Orchestrator to act as the management console for future McAfee security products.

Opportunities abound in the security market, as emerging technologies carry with them new types of threats. With the growing number of mobile devices and voice-over-IP applications being shipped today without much security protection, DeWalt sees this as a major opportunity for McAfee to address.

Likewise, social-networking technologies such as MySpace could increasingly become a target of cyber criminals as these technologies are adopted into business settings. Sen. John McCain's campaign team learned this firsthand when his MySpace page was breached and information on the site rewritten so that it appeared the presidential candidate had reversed his views on a number of topics. DeWalt sees the need to protect intelligent home and in-car appliances, virtual servers, and network-attached storage devices from cyber attackers.

McAfee will seek growth through small-scale acquisitions that add products and services without causing McAfee major business integration headaches. DeWalt made sure to point out that rival Symantec in 2004 "made a lot of enemies in this market by buying Veritas." Of course, one of those enemies was DeWalt's former employer, EMC. McAfee's strategy is instead to partner with companies such as EMC, IBM, and others moving into the security market in order to promote its own products.

The company claims to have more than 125 million users for its various products and that 40 million devices are running embedded McAfee software. Slightly more than half of McAfee's customer base consists of corporate, as opposed to consumer, users.

McAfee's revenue for the first quarter of 2007, ended March 31, jumped 16% over the same quarter a year ago, to $314.2 million. Net income likewise rose to $46.2 million, from $40.9 million from the first quarter of 2006.

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