McAfee CEO: Compliance and Cleanup - TheStreet

McAfee CEO: Compliance and Cleanup

The IT security company's new chief, in a Q&A, says he'll do whatever it takes to turn things around.
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Dave DeWalt

IT security company

McAfee

(MFE)

is ready to start the next chapter in its history.

Dave DeWalt, who was most recently executive vice president and president of customer operations for storage specialist EMC (EMC) , started Monday as the new CEO, nearly six months after former CEO George Samenuk quit over a stock options backdating issue.

McAfee has a troubled past. The company ran afoul of the

Securities and Exchange Commission

over accounting-related issues and in February saw its general counsel

charged with securities fraud for allegedly backdating options for himself and others.

Now DeWalt is faced with the challenge of not only cleaning up McAfee's books and closing the company's backdating investigation but also fending off larger rivals such as

Symantec

(SYMC) - Get Report

and

Microsoft

(MSFT) - Get Report

.

Shares of McAfee closed Wednesday's regular session up 14 cents, or 0.5%, to $29.38.

DeWalt has a successful track record: he built content-management software company Documentum and sold it to EMC for $1.7 billion in 2003, for example. He has been named to the list of top 25 most influential executives in technology by trade magazine

CRN

.

But DeWalt is still green when it comes to IT security. In the past three weeks, the CEO has been meeting with employees and getting up to speed on his company and the market segment.

In an interview with

TheStreet.com

, DeWalt outlines his focus in his first few months at McAfee's helm and how his past as an executive for a storage company will benefit the McAfee. Additionally, he shares his first impressions of the security business.

TheStreet.com

:

What will be your priorities at McAfee?

DeWalt

: We are a really good product and operations company. And our employees are looking for leadership and communication. They are looking for the old McAfee to go away and a new McAfee to emerge.

McAfee has been through a lot, and there are a lot of very hardworking people here who want this company to get back into good standing. Though a couple of individuals did wrong things, overall this is a good company. I like to use the adage, 'What doesn't kill you makes you stronger.' We are a lot stronger because of all that we have gone through.

In the next phase, we want to make McAfee a company that has world-class infrastructure. We have spent a lot of money trying to become 100% compliant with SEC regulations and regulations such as Sarbanes-Oxley. We want to be a world-class showcase for compliance. We are not there yet, but we'll get there.

We will be adding new personnel and management, as well. There are no surprises here. We have several management positions open, such as a new general counsel, chief marketing officer and head of

human resources. I will be working on that.

What do you assess as the state of the IT security business?

The biggest trend is the rapid increase in the number of threats. This is a statistic that shocked me: Every day about 2000 new threats are found. And by threats I mean a virus, or a piece of malware. In the next 24 months or so we expect to have 200,000 new threats, which is more than what we have seen in the last 20 years combined.

New threats like identity theft, which is sort of a digital crime, is on the rise. One out of four people is likely to experience a digital crime. Our strategy will be to protect consumers and companies from this, and we want to do this by being the largest pure-play vendor in security.

Building Alliances

That's interesting. You come from a storage background, having worked with EMC, while your rival Symantec has tried to create a hybrid storage and security play. What will McAfee's strategy be? Will you be moving toward melding storage and security through acquisitions or partnerships?

I don't want to comment about acquisitions. But what I see is significant opportunity to partner with storage vendors. Symantec created a lot of enemies when they acquired Veritas -- enemies such as

H-P Storage

(HPQ) - Get Report

,

IBM

(IBM) - Get Report

storage and

Network Appliance

(NTAP) - Get Report

.

That creates a powerful alliance opportunity for McAfee because we can be a company that can offer a better partnership and ecosystem. So far we have had a few relationships with storage vendors. But nothing that goes beyond a few press releases and announcements. We don't have an integrated strategy, and I will be looking to create one.

So what do you see as new areas of growth for McAfee?

Emerging markets around the world. As the Asian and Middle Eastern markets come online, with global Web and PC-based security requirements, we want to be there. And there's mobile security. We signed a deal with

NTT DoCoMo

(NTT)

and have more than 30 million users of our product in handheld devices in 12 months. If you look at

China Mobile

(CHL) - Get Report

and other large mobile carriers, you realize what an opportunity companies like McAfee have in mobile security.

You are seeing hundreds of thousands of users coming online and doing everything including Internet banking -- all of which requires strong security. It's quite a nascent market that we can exploit.

Where does McAfee stand in terms of the options investigation? When can we expect it to be complete?

We are not setting any expectations yet for closure. The term we are using is "substantially complete." We are working on the restatement, and we do have to get back on file with the SEC with our audited financials. That will take some time, and we are working toward it. We are also looking to put in the best possible internal systems for compliance.

But right now it's more about cleanup and reporting and getting back on file with the SEC. We will do whatever it takes to get there, and that's part of why I am moving to Texas to help get that process complete.

You also plan to purchase a house in Dallas. So does your move there signify a shift in the corporate headquarters from Santa Clara, Calif., to Texas?

We have already made some decisions to diversify the corporate infrastructure away from Santa Clara. We want to take advantage of new economic locations that offer good corporate efficiencies in terms of taxes and other infrastructure.

We have our finance department in Texas; I wanted to move there to supervise the accounting operations and show the employees that we'll do what it takes to put the options investigation behind us. Our marketing and sales are still in Santa Clara, and I hope to move back there once it is all done.