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11/9/2010
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Schwartz On Security: Reaching The M&A Tipping Point

The jury is out on whether businesses will benefit from Intel buying McAfee or from Symantec, IBM and Microsoft sucking up everything in sight.

The pace of mergers and acquisitions in the security industry has been breathtaking, but could it be headed for a stop?

Since last year, numerous top-tier smaller outfits have been snapped up by large players. Indeed, more than $10 billion has been spent in just the past six months by Symantec (VeriSign plus PGP and GuardianEdge), IBM (BigFix, OpenPages, PSS Systems), Hewlett-Packard (Fortify and ArcSight) and CA (Arcot).

Furthermore, the technology industry heavyweights -- who by virtue of their size largely innovate via acquisitions -- apparently still have oodles of cash at the ready.

What's behind the breakneck pace of acquisitions? One answer is that it's mirroring a growing awareness of security by senior executives. "Security is starting to get higher on their radar screens now," said Steve Robinson, general manager for IBM security solutions. "Many of our corporate accounts are starting to put in chief security officers, to expand their security teams and see that security has impact on all parts of their business."

This evolution and growing security understanding is -- on the upside -- leading customers to demand more consolidated approaches to mitigating their security challenges. Accordingly, said Robinson, "we need to move beyond the single product to solve a single problem, to more of a comprehensive strategy."

Cue mergers and acquisitions. But where should they end, and are businesses best served by a more all-in-one approach?

Consider Intel's $7.7 billion acquisition of McAfee, which surprised many industry watchers who thought endpoint security should be built into the operating system, rather than the motherboard.

The positive spin is that the deal has the potential to bake-in better security to PCs and mobile devices -- through to virtualized environments and the cloud -- from the get-go. But it also has the potential to be seen, in a few years, as an expensive one-size-fits-all boondoggle of AOL proportions.

Garter Group analyst John Pescatore likens the overall information security M&A equation to cars and boats: Would you buy a car from a boat maker? How about a boat from a carmaker? The short answer is, no. Now extend the paradigm to information security.

"I'm always amazed when network infrastructure vendors like Cisco and Juniper build security solutions that try to get us to put their software on our endpoints, and when software vendors like IBM Tivoli or CA acquire and try to sell network security products," he said. "These strategies always end badly -- it is why the McLobster sandwich and the Nobu Whopper never did well either."

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What's This?
In a digital world inundated with advanced security threats, Intel Security seeks to transform how we live and work to keep our information secure. Through hardware and software development, Intel Security delivers robust solutions that integrate security into every layer of every digital device. In combining the security expertise of McAfee with the innovation, performance, and trust of Intel, this vision becomes a reality.

As we rely on technology to enhance our everyday and business life, we must too consider the security of the intellectual property and confidential data that is housed on these devices. As we increase the number of devices we use, we increase the number of gateways and opportunity for security threats. Intel Security takes the “security connected” approach to ensure that every device is secure, and that all security solutions are seamlessly integrated.
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