Network Associates up for sale

Network Associates (NA) is for sale, and Microsoft is rumoured to be the buyer.

The maker of McAfee antivirus and security products has not made it public, but a 'for sale' sign figuratively hangs from the company's front door, according to Wall Street sources and channel partners.

A public announcement concerning either the pending or closed sale of the company to a buyer could come as early as July 1 when Network Associates also plans to announce layoffs associated with the company's for-sale status, these sources said.

Network Associates executives declined to comment and would neither confirm nor deny that the company is for sale or planning layoffs.

The company's reseller partners across the United States said more than a few of the company's field representatives have recently begun circulating resumes. 'A lot of [Network Associates] salespeople have opened up feelers for where they are going to land,' one partner said.

Some company employees gave partners July 1 as the date NA planned to execute the layoffs. The partners asked to remain anonymous.

Microsoft enters the picture as a potential buyer based on the company's desire to ascend to a level in the security market competitive with NA rivals such as Symantec, Computer Associates International and Trend Micro, sources said.

Microsoft is armed with a number of antivirus tools for Windows and is rolling out a next-generation application layer firewall, a VPN and a Web cache solution. But possession of NA's extensive intellectual property would complete a security offering for Microsoft that could go head-to-head with Symantec, CA, Trend Micro and others. Microsoft representatives said it was policy not to comment on the company's acquisition plans.

Still, Microsoft may also be the only willing buyer, Wall Street sources said, as few companies with the wherewithal to purchase the company are interested.

It appears that the company has been grooming itself to fit the bill for an acquisition by Microsoft, many partners said.

One partner, who is also a veteran of the Digital Equipment/Compaq merger, said the signs coming from NA are similar to that of pre-merger DEC, citing NA's sale of its PGP encryption product line, its Gauntlet firewall business and most recently its Sniffer network monitoring division. The partner said the company's downsizing was exactly what DEC did in order to fit within Compaq. 'It was a divestiture of all the things Compaq didn't want,' the partner said.

The sudden, announced departure of Donna Troy, Network Associates' executive vice president of worldwide channel sales, and the sudden, unannounced departure of Gary Brand, director of channel sales, each resonated with partners as signs of impending change.

At the company's recent Partner Symposium in the US, partners were repeatedly encouraged to make sure their product licensing was up to date, another sign that the company was trying to set its house in order prior to a sale, partners said.