Network Associates RePositions Itself as a Security E-Village




Event Summary

Security monolith, Network Associates, Inc. (Nasdaq: NETA) has reorganized itself to become a holding company of four independent security subsidiaries: PGP Security, Sniffer Technologies, Magic Solutions, and McAfee Corporation which spun off with its own IPO last December. Each of the four divisions stand to hire their own CEO or president to lead the strategic developments of their respective organizations.

On top of the new business model, Network Associates is opening a new front door to its four lines of business called MyCIO.com.

Market Impact

It is clear that Network Associates hopes to benefit from the increased attention the IT market, the government, and CIO's, are giving information security. However, with a website called www.mycio.com, they have more in mind than just security. As security vendors bask in the lavish attention the IT market is giving them, it makes sense to leverage this attention to create in-roads to new opportunities. Aside from being a new door to their product suite, MyCIO.com will host security applications, and will in essence operate as a security ASP.

Network Associates' savvy business strategy is a new trend which will become much more ubiquitous in the future Information Technology industry as a whole. As companies start to use the CMGi e-Village strategy to leverage new business, we will see an increase in the paradigm where larger holding companies reorganize themselves as directors of smaller independent entities. This new paradigm has many advantages that large organizations need in order to survive in this fast-paced and agile playing field of Internet startups and cyberwannabes.

Without legacy network infrastructure and legacy business processes, startups can more quickly maneuver their positioning in an ever changing battlefield. By dividing into separate entities, large corporations such as Network Associates can more easily keep pace with Internet startups by keeping their product and service lines focused and autonomous. Each Network Associates division will be able to take advantage of reduced operating costs by using a central IT infrastructure, which is exactly how CMGi rolls-its-own Internet companies.

Spinning off new divisions is also a way for Network Associates to cook up some new public offerings with stock options, which is just what they need to attract new security engineers, and retain existing key personnel. The market for capable security engineers and security managers is tight. Stock options through new IPOs is one way to give talented security engineers an opportunity to take ownership and feel more connected to the success and bottom line of an organization .

User Recommendations

What can we expect to see from Network Associates moving forward?

Network Associates' new strategy will enable it to foster closer relationships with customers, and more easily position itself for faster business alignment with the channels.

Network Associates will use MyCIO.com as a new marketing front door for its security products focusing on enterprise security solutions instead of tactical point solutions.

Through integration of its MagicSolutions HelpDesk product, Network Associates will market www.mycio.com as an on-line web-based enterprise solution center empowering IT decision makers to resolve TCO and ROI security challenges via security technology selections from Network Associates .

 
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