Network Associates plans to sell off its PGP desktop encryption and Gauntlet firewall product lines. It's a surprise move that reflects weakness in the encryption market that has hit other major players, such as Baltimore Technologies.
Up until Network Associates can find a buyer, development will cease on those products (though support will continue) while the rest of the PGP Security products and technologies will be integrated into the firm's McAfee and Sniffer product lines.
PGP VPN, PGPfire (Distributed Firewall) for corporate users, and the PGP E-Business Server will be branded and sold as McAfee products. The CyberCop vulnerability assessment tool will continue to be available as a stand-alone product, but will also be integrated into the Sniffer range of network diagnostic tools.
Network Associates hopes the restructuring, for which it will take a charge of between $9 million and $11 million in its fourth quarter, will help it save $50 million next calendar year. We've asked Network Associates how many jobs will be lost in the restructuring, as it remains unclear. However a posting on Slashdot claims between 250 and 300 people will go.
The news of the Network Associates intention to offload two of its best known products came as it announced third quarter consolidated net revenues of $209 million and a net loss of $11.3 million. The firm expects its consolidated net revenue for next quarter, which includes income from its (majority owned) McAfee.com ASP subsidiary, to be between $217 million and $232 million. ®
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