Despite musings from UBS, among others, that Cisco might consider an acquisition of McAfee, I don’t consider that scenario a probable outcome.
Too much of McAfee’s business is in the extremely commoditized anti-virus market, a place where Cisco probably would be disinclined to play, despite the company’s increasing focus on voice, video, and data services delivery to the home.
Besides, Cisco has a strong partnership with Trend Micro, whose antivirus and other anti-malware products work in conjunction with Cisco’s Network Admission Control (C-NAC) architecture. if Cisco wanted to acquire an anti-malware, security vendor, Trend could be had at less cost than McAfee and would provide nearly as much market and product breadth.
Another factor is whether Cisco wants to compete with Microsoft and Symantec in antivirus and anti-malware. I tend to think they do not want to move into that space. Cisco and Microsoft partner for more than $4 billion in revenue per year, and Cisco would prefer to pick its fights with Microsoft carefully. Now that Microsoft has declared its clear intent to compete and win in the anti-malware marketplace, for business accounts as well as for consumer patronage, I do not see Cisco wanting to risk an additional strain in the relationship over a low-growth, margin-pressured market segment such as antivirus.
In security, Cisco has firewalls, VPNs, traffic-optimization products and technologies, network-access control offerings, network-intrusion prevention products, compliance solutions, and multifunction security appliances, among other offerings. There is significant overlap with McAfee’s portfolio in many of those areas.
On the whole, I don’t see a likely scenario whereby Cisco would acquire McAfee. Similarly, Juniper’s relationship with Symantec, which admittedly is non-exclusive, would tend to preclude Juniper merging with McAfee. There isn’t another major networking player who could or would consider an acquisition or merger with McAfee.
As mentioned previously, McAfee most likely will be the target of an acquisition by a private-equity firm. Several such firms, flush with cash, are looking to buy into security, and McAfee is said to be of interest to at least of couple of them.