Cisco Systems said Tuesday it plans to buy privately held Web-based security software company ScanSafe for about $183 million.
The all-cash deal, which also includes retention-based incentives, is expected to close in Cisco's fiscal second quarter, which ends in January 2010.
ScanSafe is a cloud-based software service that allows customers to license the application on demand. Cloud-based services help customers save on costs, because they don't have to buy licenses to software and manage the software applications themselves.
The ScanSafe technology will help Cisco expand on capabilities it added when it bought IronPort in 2007, the company said. Cisco also plans to integrate ScanSafe's service with its AnyConnect VPN Client to provide a secure mobility solution. And Cisco will use ScanSafe's data centers to provide new cloud security services.
After a lull, Cisco has stepped up its acquisitions. This is the third acquisition the company has announced this month. Two weeks ago it said it would buy wireless equipment maker Starent Networks for $2.9 billion. And at the beginning of the month, it said it would buy Norwegian video conference equipment maker Tandberg for $3 billion. CEO John Chambers has said the company is looking for even more acquisitions.
Since joining McAfee from EMC, CEO Dave DeWalt has taken the company on an industry shopping spree, grabbing security companies like Onigma, Reconnex, and SafeBoot. Recent economic turmoil hasn't dissuaded the company from continuing this trend. Monday morning, McAfee announced that it will acquire venerable Secure Computing in a transaction valued at approximately $465 million.
So what do all these acquisitions bring? Diversification. In spite of its size and brand visibility, McAfee was never a niche product company in the past--strong in endpoint security, intrusion detection/prevention, and vulnerability scanning, weak or invisible in everything else. Through acquisitions, McAfee surrounded its existing franchises with additional complementary pieces. Take endpoint security and add encryption. Take content security and add DLP. Pretty soon you have a much broader portfolio.
This is the exact mindset behind the Secure Computing acquisition. McAfee was a no-show in messaging security last week, now it has No. 2 or No. 3 market share. The same thing is true for Web security, reputation services, and "in the cloud" Web security services. McAfee is now a player. Secure Computing also brings an experienced enterprise distribution channel, something McAfee desperately needs to take these new products to large organizations.
Don't expect McAfee's acquisition rampage to dissipate anytime soon. The company still needs to jump into security information management, application/database security, and possibly identity management. Don't be surprised if you see ArcSight, Application Security, Chosen Security, Courion, or LogRhythm join the McAfee stable sometime soon.
Clarification, Sept. 23, 4:42 a.m. PDT: This story originally omitted mention that the $465 million total includes consideration of cash held by Secure Computing.
Security specialist McAfee on Monday announced that it has a deal in place to acquire Secure Computing.
The merger offer is pegged at $5.75 per common share in cash, which McAfee says represents a total equity value of about $413 million. The deal also includes a cash offer for outstanding shares of Secure Computing preferred stock, valued at about $84 million. Those components, less cash held by Secure Computing, bring the total value of the proposed acquisition to $465 million, McAfee said.
San Jose, Calif.-based Secure Computing would bring to McAfee a set of products and services designed to help customers protect Web, e-mail, and network assets. With the acquisition, McAfee says it would be able to offer a complete, single-source network security portfolio to a wide range of businesses, from small to global.
The deal is expected to close toward the end of the fourth quarter, McAfee said.
Endpoint security isn't endpoint security anymore.
The old standards of antivirus, anti-spyware, and a firewall are no longer enough. In today's market, you need more types of protection like data loss prevention (DLP), full-disk encryption, or endpoint operations. The big guys like McAfee, Symantec, and Trend Micro aren't settling for one safeguard or another. They will likely have the whole enchilada in their endpoint security suites soon.
With this trend in mind, U.K.-based Sophos decided to jump into the new endpoint security game with both feet. The company announced that it is offering $340 million to acquire Utimaco Safeware, a leader in endpoint encryption and DLP. Yes, that's a lot of dough, but Utimaco is a leader in these burgeoning markets. The combination of Sophos and Utimaco can:
1. Leverage both installed bases. Sophos can up-sell Utimaco into its broad base while Utimaco customers will get an integrated endpoint suite down the line.
2. Bolster North American sales. Sophos has been keen on entering North America in a big way. It can now jump-start this effort by tapping into Utimaco customers and channel partners.
3. Compete on the new vision. As endpoint security morphs into a more holistic endpoint protection/operations category, Sophos/Utimaco could vault to a new leadership position.
Acquisitions are always risky but some become necessary as markets change. This one certainly appears to fit into this model.
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