In hindsight we should have seen this coming. I mean it’s not like McAfee even showed up for the most recent NSS Labs next-generation firewall (NGFW) test. They made noise about evolving their IPS, I mean Network Security Platform, to offer integrated firewall capabilities. But evidently it was either too hard or would have taken too long (or both) to provide a competitive product. So McAfee solved the problem by writing a $389MM check for Stonesoft.

You haven’t heard of Stonesoft? They weren’t a household name but they have had a competitive firewall product for years. Decent distribution in Europe and a very small presence in the US. They did about $50MM in revenues last year and are publicly traded in Finland.

I guess what’s surprising is that it wasn’t Cisco, Juniper, IBM, or HP. What about Cisco’s blank check to regain competitiveness in the security business? If it’s not connected to an SDN apparently Juniper isn’t interested. I guess IBM and HP hope that if they continue to ignore the NGFW market it will just go away. Hope is not a strategy. And as perimeter consolidation continues (and it is happening – regardless of what IPS vendors tell you), if you don’t have a competitive integrated product you won’t be in the game for long. So McAfee needed to make this move. Certainly before someone else did.

But it’s not all peaches and cream. McAfee has their work cut out for them. It’s not like they have really excelled at integrating any of their larger acquisitions. And they have to reconcile their existing IPS platform with Stonesoft’s integrated capabilities. Don’t forget about the legacy SideWinder proxy firewall, which continues to show up a lot in highly secure government environments. Why have one integrated platform when you can have 3? How they communicate the roadmap and assure customers (who are already looking at other alternatives) will determine the success of this deal.

To further complicate matters, integration plans are basically on hold due to some wacky Finnish laws that prevent real integration until the deal is basically closed. It is unlikely they will be able to do any real planning until the fall (when they have acquired 50% of the stock), and cross-selling cannot start until they have 90% of the stock tendered – probably early 2014. Details, details.

The NGFW game of musical chairs is about to stop, and the move towards the Perimeter Security Gateway is going to begin. The M&A in the space is pretty much done because there just aren’t any decent alternatives available to buy without writing a multi-billion-dollar check any more. Those vendors without something NGFW are likely to see their network security revenues plummet within 2 years. Select your network security vendors accordingly.

Photo credit: “Stone Pile” originally uploaded by Mark McQuitty