Dell To Acquire SecureWorks

In a move that will place it squarely in the managed security services business, Dell on Tuesday announced it has signed a definitive agreement to acquire security provider SecureWorks.

Terms of the deal were not disclosed, but the companies did say the privately held SecureWorks generated $120 million in revenue in fiscal 2010. Dell said all of SecureWorks' 700 employees will remain employed, and that the security vendor will continue to operate as a separate business unit for the near term.

The deal follows a trend of mergers between major desktop hardware vendors and security vendors that began last year with Intel's purchase of McAfee and HP's acquisition of ArcSight and Fortify.

Enterprises of all sizes are seeking to purchase security capabilities in a service-based form factor, Dell says. "[SecureWorks'] proprietary threat management platform is scalable and integrates easily with client environments," the company said in its announcement. "In addition, SecureWorks' world-class Counter Threat Unit research team helps protect clients across multiple industries from ever-changing global IT threats."

"This acquisition immediately makes Dell a leader in managed security services," said Peter Altabef, president of Dell Services. The acquisition has three goals: to help customers protect their data, achieve compliance, and lower their costs, he said.

The merger will also help SecureWorks reach more customers than it could have on its own, said Michael Cote, CEO and chairman of SecureWorks. "This accelerates our ability to reach more customers around the world," he said.

The deal helps to signal a victory for the security-as-a-service business model, says Alan Shimel of the CISO Group in his blog.

"This deal is about managed security as a business, not about security products," Shimel says. "Not even the IBM/ISS deal a few years back was so clearly focused on the MSSP side of the house. This is really a huge vindication of the MSSP business model, and notice that it has come of age."

But some analysts noted SecureWorks' strength has been in large enterprises, while Dell will likely position its MSSP services for smaller businesses that can't afford dedicated security staff.

"Acquiring Secureworks will enhance Dell's ability to offer high end security services to its larger customers, says Richard Stiennon, chief research analyst at IT-Harvest, in his blog. "While security services are synergistic with professional services and will extend the data center operations and services that Perot Systems brought to Dell, SecureWorks is not positioned to serve the small business clientele of Dell."

The merger is subject to customary closing conditions and is expected to close in early 2011.

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