I’ve worked with McAfee for a long time – from its independent days, during the Network Associates timeframe, through financial issues, back to McAfee and the go-go Dave DeWalt era, and finally as Intel Security.
To be honest, Intel’s acquisition of McAfee was always a head scratcher for me. The 20-somethings on Wall Street crowed about Intel cramming McAfee security in its chip set but this made no sense to me – Intel had long added security (and other) functionality into its processors with lukewarm market reception. The two cultures were a mismatch as well. Ultimately it seems that Intel came to a similar conclusion and recently spun out McAfee in a private equity stew.
So, what are the prospects for McAfee this time around? Like comedy, timing is everything when it comes to financial markets, customer demand, and market opportunity. The new McAfee starts its comeback in a robust $100 billion+ cybersecurity market where customers want help, vision, and leadership from their cybersecurity vendors. McAfee has a few real strengths it can deliver to this hungry market including:
- A strong integration story. While the whole concept of a cybersecurity technology architecture seems relatively new to most vendors, McAfee has invested in product integration for several years. Rather than glue its products together with some monolithic code, McAfee integration is anchored by cybersecurity middleware like its Threat Intelligence Exchange (TIE) and Data Exchange Layer (DXL). McAfee even offers an open source flavor called open DXL as security middleware for non-customers. Armed with its middleware, McAfee can pull its own or 3rd party products together to build an enterprise-class security operations and analytics platform architecture (SOAPA) and add value for customers as they integrate point tools into a common architecture over time.
- An anchor product. McAfee ePolicy Orchestrator (ePO) has been a cybersecurity professional staple for a number of years with its ability to aggregate policy management, operations, and reporting for endpoint security. Sure, ePO has taken its lumps over the past few years but the installed base remains, creating an opportunity for McAfee to reach out to customers and upsell additional integrated products beyond the endpoint alone.
- A comprehensive product portfolio. Yes, McAfee jettisoned its firewall business a few years ago, but its remaining products cover a wide spectrum of security needs including endpoint security, IDS/IPS, email security, web security, vulnerability scanning, SIEM, etc. Furthermore, McAfee still has its Security Innovation Alliance (SIA) partners who can plug into TIE and DXL and fill any remaining product gaps.
- A marquis brand. Fortunately for the company, cybersecurity professionals have long relationships and generally positive feelings about the McAfee brand. Yup, McAfee is still equated with cybersecurity leadership rather than erratic and troublesome behavior in Belize by company founder John McAfee.
McAfee is well positioned to become a cybersecurity architecture nexus at the right time. According to soon-to-be-published ESG research, 64% of enterprise organizations (i.e., more than 1,000 employees) are consolidating the number of vendors they do business with. This gives McAfee the opportunity to leverage its strengths, expand its footprint with existing customers, and pitch an architecture to prospects.
I do believe McAfee could capitalize on its market opportunity but there is still plenty of work ahead to achieve this position. McAfee lost a lot of good people (and market momentum) during the Intel years as it focused on internal operations rather than market-facing strategy. To rebound, McAfee must:
- Regain its leadership moniker in endpoint security. While McAfee took its eye off the market, an army of aggressive next-generation endpoint security vendors swooped in, castigating McAfee as a legacy signature-based AV player. The company has updated its product suite but few customers know this. To protect and even grow its base, McAfee must push back with aggressive marketing communications, channel programs, and customer incentives.
- Sell C-level solutions rather than the product Du Jour. The Intel years were especially unkind to the McAfee sales organization – there was massive attrition and channel partner churn which resulted in limited customer facetime. Furthermore, the old McAfee salesforce was coin operated, pitching whatever product the customer had budget for at the time. This won’t work when the salesforce is asked to sell a SOAPA story that involves longer-term project planning for increasing ROI and security efficacy through project phases. McAfee must invest in senior sales reps and engineers who can work with CISOs and technicians on step-by-step SOAPA rollouts, customized for business process and industry needs.
- Own the small enterprise market. While McAfee has some remaining work before its SOAPA architecture appeals to Fortune 50 companies, its story could really resonate with smaller organizations with limited cybersecurity skills and staff. This massive market opportunity should be a priority for McAfee in the short-term.
- Invest in cloud security initiatives. McAfee has some cloud security products but it is late to the party. It needs to be extremely aggressive here to establish a base before it’s too late. ESG sees cloud and software-defined security controls eating away at traditional security products and sales so McAfee’s existing base is in play.
- Double-down of services. McAfee is one of the largest cybersecurity vendors, but others at the top of the pyramid (Cisco, IBM, Symantec, etc.) offer broader and deeper managed and professional security services. Why? Because customers need help. McAfee should look for an acquisition here soon.
Finally, McAfee must hit the road and visit its biggest customers who felt neglected at times during the Intel years. CISOs at these companies need some schmoozing and details about McAfee’s vision, innovation, and investments for the future. McAfee will also need to communicate clear 6, 12, and 18 month goals and then report to the market on progress. If McAfee can meet or exceed its goals, the sky is the limit.