McAfee likes small, not big, deals

Dave DeWalt, Chief Executive Officer and President of McAfee, Inc., speaks during the Reuters Global Technology, Media and Telecom Summit in New York May 21, 2008.

NEW YORK (Reuters) - McAfee Inc, the No. 2 security software maker, likes small and medium-sized acquisitions of up to about $350 million and sees no need for a transformative deal to challenge larger rival Symantec Corp.

McAfee Chief Executive Dave DeWalt said on Wednesday he aims to accelerate revenue growth in 2009 and 2010 beyond the company's target of mid-teens percentage growth for 2008.

Growth should come through a combination of new products, partnerships with technology companies, and acquisitions like the $50-million-to-$350-million deals McAfee has made in the past, DeWalt said at the Reuters Global Technology, Media and Telecoms Summit in New York.

"We don't necessarily need to acquire large to do this. This is a strategy for us where acquiring technologies and building and partnering is clearly a path that we can create to grow the company to much more sizable than it is today," he said.

"We tend to do two to three acquisitions a year. We've been consistent with that," said DeWalt, a sports enthusiast who competes in triathlons. "We continue to like to do what we call small and medium-sized acquisitions."

The CEO, who has been with McAfee for about 14 months, said that security software has so far proven to be recession-proof because customers need to protect against viruses and data theft in rough times as much as when the economy is strong.

But he cautioned that his company could see a fallout down the road from the economic slump in the United States.

"Am I nervous? Do I read the headlines too? Yes," he said.

Still, DeWalt noted that the company has posted three accelerating growth quarters in a row.

"We certainly see '09 and 2010 as very strong growth years for the company with a lot of the partnerships we set up, a lot of the model changes we had," DeWalt said. "Certainly, it's hard to forecast how the economy and things will be; but certainly we put a lot of growth drivers in the business to really accelerate growth even more."

McAfee plans to introduce a variety of new products over the coming quarters to build new revenue streams.

One area with great potential is protecting data centers that use virtualization technology to boost the efficiency of their servers and storage equipment, he said.

Products in these areas are in the works, including ones that will scan traffic before it is stored and scan data used by applications from giant German software company SAP AG.