The security industry is known to be somewhat incestuous at times. The same faces can often be seen running, investing or purchasing companies.
Over the recent weeks and months though, some of the M&A activity reads like an episode of Jerry Springer.
In July of this year, HP declared the corporate-consumer marriage was no longer working and announced its intention to split into two companies.
Trend Micro sensed that TippingPoint was the unloved child in HP’s single-parent home and picked up all of TippingPoint’s products, 316 employees and 2300 customers for $300m.
A purchase that by all accounts was a bargain, considering HP acquired TippingPoint over 10 years ago from 3Com for $450m. The deal seems even more impressive when compared to Cisco’s acquisition of Sourcefire in 2013 for $2.7b
There’s a scene in the social network where Justin Timberlake’s character utters the quote, “A million dollars isn’t cool, you know what’s cool… a billion dollars”
I suspect that is what was going through Michael Dell’s mind as he sent waves through the industry when Dell acquired EMC for $67b … the largest deal in tech history.
Dell was a public company until 2 years ago when it announced its acquisition by Michael Dell and Silver Lake Partners. Silver Lake Partners also recently joined forces with Thoma Bravo and took SolarWinds private for $4.5b.
For completeness sake, we also saw Thales acquire Vormetric for $400m
All that’s lacking are a couple of burly bouncers separating rival vendors whilst the crowd chants “Jerry! Jerry! Jerry!”
Within 12 hours of publishing this article, we just saw Cisco acquire Lancope for $435m.
Buying, selling, going public or going private – the IT security industry seems to be making money whichever direction it turns. But the general message seems to be one of consolidation. Dell said, “The IT marketplace wants fewer vendors, not more.” Trend Micro hopes the buyout will position it to become the “go-to enterprise security provider.” This is all well and good, but acquiring a company and integrating the technologies are two very different propositions. Symantec tried for years to hold together its security and storage arms, but eventually conceded and split Veritas. Maybe EMC could have swapped RSA for Veritas at the time and both companies would have been a lot happier. Whilst the IT market place may want fewer vendors – the strings attached to this is buyers want a simpler experience to accompany that. They want a technology stack that looks like it was cut from the same cloth – as opposed to a Frankenstein stitched together from various parts. That will be the biggest challenge if any of the mega-providers want to attain their desired vision.