NWC Interview: McAfee's Dave Dewalt

What's it like to come onboard a company facing incredible competitive pressures, executive turmoil--you're the fourth CEO in six years--and a stock-options back-dating scandal?

When you break it down, is there really competitive pressure, or is it just the mystique of Microsoft or Cisco competing with you? It's much more of the mystique. The competition of Microsoft and Cisco is not that real for us and what we do.

Here's a company that's growing nine consecutive quarters in a row, with record revenues. Yes, it's had its stock-options challenges. So have a lot of public companies. The good news is the company is coming out the other end. The last quarter we announced the SEC preclearance letter finally is under way, which means the next thing is to be back on file with the SEC.

Yes, we've had executive turnover, but that's an opportunity too. I've had a chance to bring world-class new management into the company, augment the management that's there, and help grow this company. The company has grown 16 percent compounded year over year. So most of those [problems] are superficial. When you look at the fundamentals, McAfee is a strong company.

Three or four years ago, the security market was dominated by pure-play security vendors. Now Symantec has branched out into storage and management, ISS is a small division of IBM, and RSA is a part of EMC. Are standalone security companies an endangered species?No, I don't believe so. If you look at markets over the years, most go through two to three phases. You go from a best-of-breed model to a best-of-suite model. Ultimately it consolidates more and you end up with two or three large companies that dominate the landscape.

The security industry is so nascent. We are just moving from best-of-breed model to best-of-suite model. And McAfee has been leading the way. Eighteen months ago we launched TOPS (Total Protection Suite) for consumers, midmarket and enterprise. We're way ahead of Symantec and others who are trying to do that now.

Antivirus software is a commodity these days, yet it still drives half of McAfee's revenues. Are you comfortable with this situation?

One of the challenges McAfee has is misperceptions about the company. It's not true that 50 percent of our revenue comes from AV. About 50 percent comes from the consumer business, but that's not just the AV part of the business. We have a suite approach to products for the consumer: antispam, anti-spyware, desktop firewall, HIPS, data loss and protection. The other half of the business is enterprise. About 50 percent of our revenue comes from the enterprise.

Information leak prevention is a new growth area in the security market. Are there opportunities for McAfee here?There's a lot of opportunity for security vendors in the area of content protection or data-loss prevention. One of the biggest problems we're seeing in the industry is $40 billion of loss per year for corporations and consumers around data loss. This has become a big business.

I see you started to blog. Most executive communications tend to be highly scripted and drenched in the corporate Kool-Aid--the exact opposite of what readers want from a blog. What can we expect from you?

It's not a scripted blog for sure. It's there to be fun and create an emotional attachment to the company. In the first four hours of the blog launch, we had 40,000 e-mail responses. It goes to show people want to tell me what to fix or what we're doing well.