September 18th, 2006
Welcome EMC!
Today EMC announces the completion of their acquisition of RSA, fully joining the ranks of big security players. What I like most about this acquisition is that it was accompanied by a well articulated plan to create a business around protecting data and the infrastructure that contains it. EMC has stated the size of that business is expected to grow quickly to over $1 billion. Obviously that means more acquisitions. So they are heralding the consummation of the RSA deal with an announcement that EMC is acquiring Network Intelligence, a security event management (SEM) product vendor.
This is a good time to make a strategic security play. I feel bad for the other giants that have had to purchase immature companies with no market traction and under-developed products. RSA was a brilliant acquisition. They had an unassailable reputation, growing market penetration, and had themselves made only a few strategic purchases. Network Intelligence is a good choice as well, with a competitive product, base-lining features that I think are a differentiator for them, and probably a fair financial deal to boot.
Note that these are strategic acquisitions; they enhance EMC’s ability to deliver safe and secure data management to their customers. These have nothing to do with consolidation. If Arcsight had bought Network Intelligence – that would have been consolidation. ISPs consolidate, banks consolidate, telecom equipment vendors consolidate. Security companies don’t.
What’s next for EMC? Answering that type of question is what gets an industry analyst up in the morning. My prediction: a leak prevention company. It may be Vontu, but they are probably way overpriced. Reconnex or even PortAuthority would be good.
And, while we are on the subject of acquisitions… There are rumors floating around that Check Point Software, after their disappointment with the failed attempt to buy Sourcefire, is on the prowl. My word of advice to Check Point: look to the network! There are billion dollar opportunities in network security still left on the table. If you listen to Wall Street and get into SEM, or leak prevention, or some other non-network area of security you will continue to lose market share in the space you created. Want to hear more? Call me.
Richard Stiennon is an industry consultant. See his full profile and disclosure of his industry affiliations.
