McAfee Buys Trust Digital in a Bid to Go Mobile
It's been a tough year for McAfee. In the latest quarter, the company's profits fell by 30%. Part of the reason was lackluster follow-through from the sales organization. But of course, McAfee also suffered from a botched anti-virus update that crashed some customers' computers.
In the meantime, McAfee's rivals have been pushing hard. For example, Symantec (SYMC) has recently spent $1.65 billion to acquire PGP, GuardianEdge and VeriSign's identity and authentication business.
Despite all this, McAfee is trying to get things back on track, as the deal this week shows.
Smart Phones Provide Big Opportunity for Trust Digital
With the emergence of smart phones -- and the increasing use of mobile apps -- it is inevitable that there will be security problems. Mobile carriers have some control over security, but it is far from foolproof. More importantly, enterprises want to make sure that workers are not accessing dubious applications or wasting time on YouTube, Facebook or iTunes.
And yes, such problems have been a big opportunity for Trust Digital. The company has developed security products for Windows Mobile, Symbian, Android, webOS and even the iPhone. The functionality is quite extensive, handling things like authentication, encryption, application controls and so on.
While the technologies are strong, it is not easy for a small company like Trust Digital to get traction with enterprise customers. This is perhaps a key reason for the sale to McAfee, which certainly has a massive footprint. Besides, McAfee's mobile security offering is fairly limited -- with a focus mostly on Windows Mobile.
Although it looks like the main focus of this deal is the market for the iPhone and iPad. Interestingly enough, workers are demanding these kinds of devices and even paying for them out of their own pockets.
As should be no surprise, other companies are gunning for this space as well. Mobile security was a key reason for SAP's (SAP) recent $5.8 billion agreement to purchase Sybase (SY).
It is still early days in the mobile security market and McAfee is smart to make this acquisition. Yet, as seen recently, the company has had issues with execution. So hopefully McAfee is taking swift actions to correct the operational problems.