Intel Management Engine is an embedded controller they put in the CPUs to add extra security to the chips.
Here's their explanation:
The Intel® Management Engine is an embedded microcontroller (integrated on some Intel chipsets) running a lightweight microkernel operating system that provides a variety of features and services for Intel® processor–based computer systems.
What kind of features does Intel® Management Engine have?
Features include (but are not limited to):
- Low-power, out-of-band (OOB) management services
- Capability Licensing Service (CLS)
- Anti-Theft Protection
- Protected Audio Video Path (PAVP)
At system initialization, the Intel® Management Engine loads its code from system flash memory. This allows the Intel® Management Engine to be up before the main operating system is started. For run-time data storage, the Intel® Management Engine has access to a protected area of system memory (in addition to a small amount of on-chip cache memory for faster and more efficient processing).
A fundamental feature of the Intel® Management Engine is that its power states are independent of the host OS power states. This feature allows it to be up when the microprocessor and many other components of the system are in deeper sleep states. As a result, the Intel® Management Engine can be a fully functioning component as soon as power is applied to the system. This capability allows it to respond to OOB commands from the IT management console without having to wake up the rest of the system. Therefore, power consumption is reduced significantly.
For 99%+ of individual consumers, it is not needed and has no functional use. For IT professionals, it can add some benefits of theft prevention, license management, etc. It is something Intel has made for mostly business use and their tool that tells you if it's functional or "providing adequate protection" is going to tell you that you're not protected unless it's fully up to date and enabled. Whether that's important to you is your call. Just like "memory integrity" setting within Windows...you can enable it and make sure your CPU is less susceptible to exploits, but it also hinders performance (and functionality in some apps), so most gamers just disable it anyway.
That tool you're looking at is a closer example to antivirus software that tells you your system is not protected unless you buy their highest bloatware that they sell. Does it actually mean your computer is at risk? Probably not.
This is why there are plenty of people that just disable Intel ME anyway.