Network Associates (NAI) was now a bloated giant with five divisions: McAfee antivirus, Sniffer network analysis, Magic Solutions (helpdesk), Landesk (from Helix), and an exit from PGP. The company was losing money and focus.
For the next six years, PGP Corporation thrived independently, acquiring other crypto firms (like Guardian Edge). Meanwhile, McAfee, Inc. grew into a $5 billion security giant, but it lacked native, strong encryption. In , Intel announced a blockbuster acquisition of McAfee for $7.68 billion. But before that closed, McAfee itself needed to fill its encryption gap.
To understand the modern cybersecurity landscape, one must look back at the late 1990s and early 2000s—a period of rapid fragmentation followed by aggressive consolidation. This was an era before "endpoint protection platforms" existed. Instead, the market was divided into distinct silos: antivirus (McAfee Associates), network analysis (Network General), desktop policy management (Helix Software Company), and cryptography (PGP Corporation). The story of how these four entities merged is not a simple acquisition by a single buyer, but a complex web of reverse mergers, spin-offs, and private equity engineering that ultimately reshaped enterprise security.
But the marriage was disastrous. NAI tried to force PGP into a closed-source, enterprise-sales model, alienating the open-source community. Developers inside PGP revolted. By 2001, NAI management, under new CEO George Samenuk, decided to exit the cryptography business entirely. In , NAI announced it would discontinue development of PGP. That decision sparked an outcry, leading to a management buyout. In August 2002 , a group of investors including PGP’s original founders bought the assets back, forming PGP Corporation as an independent entity. This decoupling is critical: PGP left the Network Associates orbit just as NAI was rethinking its entire strategy.
