McAfee Plans to Acquire Security Cos.

Security software vendor McAfee plans to acquire security companies that have technology that can be quickly integrated with the company’s products, an executive of the Santa Clara, Calif., company said Wednesday.

McAfee is scouting worldwide for companies that can offer interesting technologies in areas such as wireless security and safer Internet surfing for users, George Samenuk, McAfee’s chief executive officer and chairman, told reporters in Bangalore, India.

The acquisitions will be wholly in cash, and the deal sizes could range from US$20 million to $500 million for an acquisition, said Samenuk, who added that the company had more than $1.2 billion in cash and was debt-free.

McAfee’s acquisition plans come even as the company is expanding its product development teams in India and other locations.

“If we see a technology that would take us two to three years to develop, we prefer to acquire it,” Samenuk said. If the company’s engineers promise to deliver a technology within three to six months, the company is more likely to develop the technology in-house, he said.

McAfee announced Wednesday that it is increasing the number of staff at its center in Bangalore to 1,000 by the end of 2008. The company also announced that it will invest $80 million in the center over the next four years.

The Bangalore center, which is McAfee’s largest development facility, currently employs about 600 staff, of which about 400 are doing product development. The center is involved in the development of all of McAfee’s products and has end-to-end ownership for about six products. The center is also planning to get into product management for some of McAfee’s products, said Sridhar Jayanthi, head of the company’s operations in India.

Apart from product development work, the center also offers customer support and other business-related services, Jayanthi said. The center has contributed significantly to McAfee’s revenues and profitability, Samenuk said. There is a shortage in the United States of security professionals and researchers, and in India the company found a large and trainable talent base, he added.

-John Ribeiro, IDG News Service

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