Monday, April 30, 2012

Roomba - Product that I love

A friend asked me recently to think about some products that I would love to manage.  Roomba was the first thing I could think of.  I acquired my first Roomba almost a year ago and liked it so much that I bought another one as a gift for my parents.  The Roomba is a great product because it solves a very common problem  in an unconventional, but effective way.

As the parent of a toddler (think spills and dirt), I love switching on my Roomba when stepping out of the house and coming back to a clean room.  What a time saver!  Some features that I would introduce in the Roomba (or other products in the portfolio) would be -

  1. Ability to clean stairs
  2. Make it less noisy
  3. Ability to mow my lawn 
  4. Ability to remove dust from furniture (a la swiffer)
  5. Ability to clear cobwebs

Tuesday, April 17, 2012

McAfee - Strategic value or Botched Acquisition?

McAfee was one of the absolute best companies that I have worked for in my short career. From 2006 through 2011 (just before its acquisition by Intel), McAfee nearly doubled its revenues at a healthy CAGR of 12.51% -

The only other large security company (500M+ in revenue) growing at a similar pace was Checkpoint

Intel acquired McAfee for $7.68B in 2011. As an insider, I was surprised that Intel never clearly articulated the rationale behind the acquisition. I also know that a number of senior execs left McAfee shortly after the acquisition was announced - Dave Dewalt, George Kurtz, Rosen Sharma, Dmitri Alperovitch to name just a few.

Looks like the exodus was a leading sign of a massive step backwards. Today, Intel announced its 2011 results with breakup of the Software and Services group which is the unit which includes McAfee and Wind River. Intel claims that it wrote down $204 in deferred revenue. The accounting period is also a little different (McAfee's fiscal year was aligned to the calendar year, Intel's FY is staggered by 3 months).

But, these adjustments should be more offset by the revenue from Intel's Wind River and other software operations. Wind River had revenues of $350M+ when it was acquired in 2009. In other words, McAfee's post acquisition performance has been disastrous. I'd guess that Checkpoint, Imperva, Palo Alto Networks, Splunk and even Symantec are the ones who have benefitted from Intel's acquisition of McAfee. Thoughts?