eGov-Sept-2010-[32-33]-Extending Moore's Law

Analysis

SECURITY

Extending Moore’s law

Intel’s acquisition of McAfee literally amounts to packing security as a component on the chip. How will it work?

By Deepak Kumar

I

ntel’s co-founder Gordon Moore penned down an empirical observation in 1965, noting that the number of components that can be packed in an integrated circuit would double every year. Later he made a revision stating that the doubling would happen every two years.

The statement has since been formalised into one of the most venerable laws in the technology industry. It’s been a yardstick for setting targets at semiconductor companies, particularly at Intel. It has held ground for nearly half a century now and doesn’t show any definite signs of aging yet.

Moore’s law has served as an unwritten policy statement for Intel and has played an important role in steering the company to a formidably dominant position, so much so that the chipmaker’s performance today serves as a barometer of the IT industry.

That, however, will not be enough to take Intel far and beyond in an era where industry dynamics are rapidly shifting from PCs to mobile devices and from hardware to software.

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egov / www.egovonline.net / September 2010

Analysis

This is the premise that sets a basis for acquiring companies that can bring robust software capabilities to the chipmaker.

Does that fully explain Intel’s big-ticket McAfee acquisition at US$ 7.7 billion? Or are there elements of disconnect and ambiguity?

Let’s view the announcement in the backdrop of some prior acquisitions.

Some prior moves Indeed, Intel has known the risks of sticking only to the PC and server segments for long.

As early as 1999, it made serious attempts to extend its dominance to segments other than PC and server segments. With the objective of foraying into the mobile phone segment, it acquired DSP Communications for around US$ 1.6 billion, an investment that did not pan out as expected and led to an impairment charge of US$ 600 million later in 2003.

Intel’s energies have since remained largely focused on making PC chips better and better. Most of its acquisitions too—small or big—were aligned with this focus. Like last year, two small software snap-ups—Cilk and Rapidmind—were aimed at giving developers better leverage with the chipmaker’s growing portfolio of multi-core platforms.

However, Intel’s much larger acquisition in June last year—of embedded and mobile software maker Wind River Systems—was a bigger leap forward, into wider realms of software.

The deal that was valued at US$ 884 million in July 2009, in the midst of an economic crisis, was stated in a press release to be “part of Intel’s strategy to grow its processor and software presence outside the traditional PC and server market segments into embedded systems and mobile handheld devices.”

That was logical given that Intel had actually stepped out of its stronghold of “traditional” PCs and servers and tasted fair amount of success with its Atom processors designed for a new genre of net access devices. An innovation in hardware had helped it travel a certain

The chipmaker will need early adopters for a “McAfee inside” approach to work like the “Intel inside” messaging did

distance, and there had to be a software vehicle to take the journey further...

The importance of hardware-software interplay is evident from the fact that historically neither Intel nor Microsoft’s Windows platform have singularly been credited with the crowning success in the PC market segment; the honours have been given to Wintel—the unofficial combo engine at work.

At the same time, it’s been no secret that both Intel and Microsoft—while benefiting from their long-standing equations—have also clamoured to lead when it comes to determining the direction of the PC and server market segments, among other IT segments as well.

Unsurprisingly therefore, Intel has a long history of duly supporting developments in the open source software spheres. The Moblin OS and application stack, which was later merged with Nokia’s Maemo project to create the MeeGo project this year, is also a software case in point.

Is it about security?

If viewed independently, the McAfee deal indeed may be seen as Intel’s attempt at growing its circle of influence in enterprise IT market, considering that security has remained among the top-most concerns for enterprise CIOs and IT mangers.

One possibility would be that McAfee technologies could be adding more teeth to Intel’s existing hardware-based security program vPro. However, there has been scepticism if hardware-based security will be able to provide quick guards against security threats that are ever new and so dynamic in nature.

Intel’s strategy on how it will meet this challenge is not pronounced, but logically it could be using Wind River’s technological depth in embedded platforms to stitch together an acceptable solution. Also, the fact that the McAfee acquisition has come only after Intel had reportedly worked with the security specialist for several months on various projects indicates that a neat-enough roadmap might well be in place.

There is also a successful precedence in the IT industry that can come handy—EMC’s successful acquisition of RSA effected nearly four years ago.

Having said that, just security can’t be Intel’s strategy; it’s got to be much bigger—maybe to get a share of the software market pie. Some observers have even gone as far as speculating

that Intel would want to eventually put its fingers in the services pie too.

And the mobile piece?

Well, the segment has gotten too significant to ignore, more than ever before. And from that viewpoint too, the Wind River buyout last year and the McAfee acquisition now, are important. Both have been fairly well positioned in the mobile space to serve as key footholds in developing an ecosystem around Intel’s processor platforms like Atom.

Atom’s success so far has largely been limited to the netbook space and it will be critical for Intel to crack the smart phone segment.

Thankfully, equations in the mobile market segment have changed much since about ten years ago, when Intel would have been seen as a dreaded Goliath. Today, Nokia is working with Intel on MeeGo project, even as Intel has been porting Google’s Android to its Atom platform.

Security has not been much of a concern on mobile devices so far, but as preferences grow for mobile-based commerce and transactions, that would change. Arming these devices with biometrics-based protection, for example, would be a necessity in due course of time.

It’s another matter that the upgrades and innovations in the Atom-based product lines have been slower compared to those evident in the smart phone segment...

Building early adopters Intel will need some early adopters for a “McAfee inside” approach to work as well as the “Intel inside” messaging has worked.

Government and education verticals, by virtue of their less ephemeral computing processes and application needs, would be better suited for a security-on-the-chip architecture.

Early successes in these segments would also build a technology—and business—case for other verticals.

The security threats in the mobile space are not yet looming large and Intel will therefore have some time at hand to seal a compelling proposition before mobile security concerns get real and alarming!

the author is a market researcher and consultant, specialising in IT and Telecom

September 2010 / www.egovonline.net / egov

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