Internet and Information Technology (IT) security major McAfee Inc. (MFE) recently entered into a strategic alliance with networking solutions major Brocade Communication System Inc. (BRCD). As per the terms of the agreement, Brocade and McAfee will work together to incorporate McAfee’s extensive security measures into Brocade’s networking products.
The technology majors will be collaborating on a set of combined solutions developed to cater to the network security needs of large and medium enterprise customers. This is a multi-year partnership agreement and in the next stage, the companies will extensively use their security intelligence information to further strengthen security.
Security and improved networking have drawn the attention of IT managers across the globe. The requirement of proper IT security infrastructure is further compounded as a result of increase in data traffic being transferred through devices, such as personal computers and mobile devices. Organizations are increasingly becoming aware of the security risk that they may encounter from different access points, which may in turn result in loss of revenue, valuable data and brand image.
On the other hand, we believe that the IT security market has already attained some maturity, as many companies have already implemented anti-virus software and solutions. But other segments in this domain, such as data protection, leak prevention and security information management, offer additional opportunities for growth.
As per the latest findings of the technology research firm IDC, the Asia-Pacific region (excluding Japan) is expected to generate stronger demand for IT security in 2010, as companies and users respond to emerging threats to IT security.
IDC believes that the security and vulnerability management (SVM) market will be posting the largest growth this year and grow by 19.0% to $115.44 million in 2010. The secure content and threat management (SCTM) market, is expected to grow at 18.4% to $1.13 billion, whereas the Identity and access management (IAM) market is expected to grow at 15.2% to $326.38 million. We believe this is good news for McAfee as the company dabbles in more or less all the segments mentioned above.
McAfee reported encouraging fourth quarter 2009 numbers, with EPS of $0.64, exceeding the Zacks Consensus Estimate by $0.16. Revenue for the quarter was $525.7 million, registering a growth of 24.0% year over year and 8.0% sequentially, attributable to good execution and strong demand for security solutions.
The company has projected EPS guidance in the range of $0.60 to $0.64 per diluted share for the upcoming quarter. We expect McAfee to report decent numbers in the upcoming quarter, although it may not outperform the broader market, as Internet security has reached a mature phase and supply is moving in-line with demand.
Read the full analyst report on “MFE”
Read the full analyst report on “BRCD”
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