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Risk

5/20/2010
07:29 PM
George V. Hulme
George V. Hulme
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Symantec Snags VeriSign for $1.28 Billion

Symantec yesterday announced that it has signed an agreement to buy VeriSign's identity, authentication, and SSL certificate businesses. That essentially gets VeriSign out of the security business, but what does Symantec really get out of the deal?

Symantec yesterday announced that it has signed an agreement to buy VeriSign's identity, authentication, and SSL certificate businesses. That essentially gets VeriSign out of the security business, but what does Symantec really get out of the deal?The acquisition will help Symantec to make a stronger push into both the identity management and mobile computing trends necessary to secure cloud computing and the continued consumerization of data consumption. It's also a continuation on Symantec's ongoing shopping list, as reported by InformationWeek's Antone Gonsalves in his story earlier today:

In trying to provide one-stop shopping to customers, Symantec has been on a buying spree. In late April, the company announced that it would buy privately held PGP and GuardianEdge for a total of $370 million in cash. The purchase, set to close this quarter, is expected improve Symantec's position in the data encryption market, which is expected to reach $1.7 billion by 2013, according to IDC.
I spoke, right after the acquisition was confirmed by Symantec, with Scott Crawford, managing research director at Enterprise Management Associates and here is one of the points he made in an e-mail:

The deal is good for Symantec, which definitely needs this technology in order to solidify its focus on information-centric security, security from and for cloud computing and hosted environments, and identity-linked concerns. Identity is fundamental to recognizing legitimate resources and differentiating who has authorized access to what.

Crawford sees the pieces of the VeriSign products and services fit into Symantec's product puzzle much the way I do. In public clouds company's don't control the infrastructure or data, so encrypting data in the cloud is vital. But it's certainly no silver bullet. While SSL certificates can help to make certain the connections of people, applications, and systems are legitimate. And strong authentication is just a vital as ever as more remote resources are available than ever before.

So it's about filling some obvious product gaps in Symantec's abilities so the company can adapt to the changing ways IT services are used and data consumed.

Crawford acknowledges that all of these areas are far from Symantec's wheelhouse of threat defense. And the folks at Securosis wrapped up Symantec's deal risks much better than I could:

• Integration risk: As we've mentioned before, Symantec's forte has been doing deals, not doing deals well. And trying to integrate the encryption companies at the same time threatens to stretch an already thin management team way too thin.

• Bundling risk: It's not like anyone has really tried to bundle SSL certs or tokens with anything else. It's always been a standalone business. And without some distribution leverage, they can't make this deal pay.

• Incumbent risk: VeriSign was the big dog in SSL, but in enterprise authentication they've largely struggled. Which makes this an unusual deal for Symantec, which tends to overpay for market leadership. The question is whether Symantec's channel is willing to replace RSA, which may not be a stretch given EMC's general channel unfriendliness.

• Whole product risk: Symantec shouldn't stop at authentication, but should use this as a platform for building a full identity offering. So that means looking at provisioning (Courion) and Federation (Ping Identity), or perhaps even another bold move to take Novell's identity business.

And, to put a really fine point on it, Symantec has a sketchy (to be kind) history of acquisitions, from storage vendor Veritas to security services firm @Stake, to a slew of security technology that seems to have faded into the background within Symantec's fold.

Of course, such waves of consolidation are completely normal in the tumultuous IT security market. And, in the long run, provides some daylight for nimble new players to enter and compete.

For my security, technology, and business observations throughout the day, find me on Twitter.

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