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Apr 06, 2017 12:15 PM EDT

McAfee To Face Tough Challenge After Intel Spin-Off, May Face Serious Competition In The Cybersecurity Market


Remember McAfee? The eponymous US-based cybersecurity company that Intel bought for a whopping $7.68 billion in 2010. Well this week, the company is going solo again, along with its brand new CEO and new cybersecurity vision. The company is also hosting a new contest.

McAfee, the cybersecurity stalwart that originally founded by John McAfee, is now officially back on security business. The Santa Clara, a California-based security company has just emerged as a $2 billion standalone cybersecurity company this week. Leading McAfee's cybersecurity charge will be its newly installed CEO Chris Young, who already served as senior vice president of Intel Security, Intel's cybersecurity arm, the Yahoo Finance reported.

The US tech giant Intel has acquired the Santa Clara-based McAfee in 2010. For $7.68 billion, it's a huge deal for Intel, one that could drain the tech company lots of cash. But at that time, Intel is quite serious and got high hopes for McAfee. The chipmaking giant has big plans to integrate McAfee's world-class security capabilities into Intel's chips to better protect Intel-powered consumer devices.

Everything went normally at that time, the revenues and sales grow. By the first half of 2016, McAfee's revenue hits a record-high of $1.1 billion, an 11 percent rise from the previous one. However, things get tough for Intel in the mid-2016. The company has taken a heavy beating and it needs some major adjustment.

Then came the unthinkable, the massive restructure in April 2016 and the layoff of 12,000 jobs. The goal is to shed "excessive fats" and to focus more on cloud computing, thus keeping the security company McAfee didn't seem to make sense anymore for Intel. McAfee must go.

McAfee has just returned to its roots after the big Intel spin-out. This week, it's embarking on yet another new journey, becoming a new, jointly-owned independent cybersecurity company, with majority backers Intel retaining 49 percent ownership and private equity firm TPG owning the remaining 51 percent stake. The deal, which was announced last September 2016, has valued the cybersecurity firm at approximately $4.2 billion, a far cry from its former valuation of $7.7 billion

The sudden drop in the market valuation is not the only thing that's different at the returning McAfee. The cybersecurity stalwart also has a new CEO, the: former Intel Security head Chris Young, with an ambitious to-do list. Young's list does not end with rebranding the entire company as a top maker of all cybersecurity stuff but also retaining customers in a fast-evolving security landscape that's more crowded and more competitive than ever.

Unfortunately, going solo would not be easy for McAfee. The company would surely face a tough challenge in day one of its transitions, and transitions will likely to take a huge amount of time. Not to mention the growing competition in the market, which now has more competition than even before, ranging from small but highly specialized firm to a very large, untouchable company.

What's clear for now is that for Intel, there's one big potential gain from spinning out the cybersecurity firm. It's the huge, pricey acquisition of McAfee, consummated in 2011, and was heralded as a way for the tech giant Intel to fold security features into its chips to better protect its customers.

In another McAfee-related story, the cybersecurity company has just announced a new #newMcAfee Re-Tweet to Win! Contest. In its celebration of its transition, McAfee will is hosting a "retweet to win" social Sweepstakes, which open to everyone, that will run throughout the month of April 2017. For more details about the McAfee's newly announced contest, check out the McAfee Blogs.

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