Mr. Market Says Security Is Winning

Today Dell announced its intention to acquire SonicWALL from private equity firm Thoma Bravo. This is less than two years after Thoma Bravo took SonicWALL private in a screaming deal, and with a deal size rumored up to $1.5 billion I think we can safely assume the bankers win again. As always. At some point I think Mike, Adrian, and I need to write up some post-acquisition boilerplate. Something including, “customers should talk to their sales reps/brain drain/happy bankers/watch this space/blah blah blah”. This is probably good for Dell because it will help address needs in their core SMB market, and SonicWALL cost less than a quarter what it would have to nab Fortinet. If the SecureWorks brains can feed the right intel into product development, things will probably work out just fine. Besides, with razor-thin hardware margins Dell needs to move into software and services, and security assets such as SonicWALL enhance both. But that isn’t what I want to talk about today. There is a bigger, more important issue at play. The simple fact that this deal went down, now, combined with some other indicators, is good evidence that the security market is succeeding despite ongoing headlines and opinions to the contrary. We’re going mainstream, baby! Acquisitions As Indicators Over the past year we have seen accelerating interest in security from mainstream IT vendors. Powerhouses like IBM, HP, and Dell are buying up security companies left and right. Even Intel got into the action with their purchase of McAfee, and Juniper with Mykonos. An even more specific indicator is the big vendors assembling all their assets into dedicated security business units. Some GM or SVP has a quota to sell security products. And it’s a high quota. Random acquisitions are nothing new, but all these companies are both talking about and building security portfolios on a larger scale than before, and devoting the resources to back them up. These big companies are hiring security folks (both product and services) like mad, and they have hundreds of sales folks pushing security products. Actually, only Cisco seems to be screwing up and moving in the other direction by talking about embedding security into everything. Reading between the lines, that means they no longer want to compete on the merits of their products. And talk about a brain drain. But that’s another story for another day. The Plural of Anecdote Big IT companies have been dabbling in security for years. The difference now is the growth in scale and the tone of the conversations. Every single one of these companies is citing direct customer demand and (off the record) competitive concerns. I don’t have numbers to back this up, and anecdote isn’t necessarily data, but enough anecdotes usually point to a trend which must be heeded. So we have multiple non-security vendors simultaneously making significant investments in security tools and services to offer their customers. Companies like IBM and HP that already have a lot of security products are each reorganizing their internal groups – all at the same time. Draw your own conclusions, but we see the writing on the wall. Big companies move slowly and are risk averse. They don’t need to innovate because they have a distribution machine that moves billions in products and services every quarter. They don’t move unless they feel forced. They are defensive, and acquire to protect markets, not to create them. Multiple, large, non-security companies all acquiring and reorganizing at the same time is a lagging indicator. Customers continue to struggle with security, and they demand better solutions from the folks who sell them millions of dollars of gear each year. They are tired of dealing with an armada of small start-ups to solve niche problems. They want the problem to go away, and the big guys are all worried that if they don’t at least address the problem they will lose their ability to milk the enterprise cash cows. #Winning There has been a lot of talk about us losing the battle. In a recent Incite, Mike talked about having a little perspective about what winning really means for a security professional. But if you want to be somewhat optimistic, maybe we need to look at winning in a different context. Maybe we are ‘winning’ because all the non-security people who we always claim “don’t get it” are driving dinosaurs (like IBM, HP, and Dell) to change direction and start taking security more seriously. These big companies are voting with their dollars, and there is no better indicator of seriousness. Security is in demand and clearly not being ignored within the upper echelon of IT companies. As Mike likes to say, Mr. Market is talking, and for once he’s saying ‘security’. Share:

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