Friday, October 3, 2008 Sophos adds encryption to full suite of security software
By Christopher Calnan
This week’s expansion by Sophos Plc. into the encryption space, which will allow it to offer a complete suite of security products, is bucking the trend of New England tech companies developing IT security tools to fill narrower market niches.
Sophos, a U.K.-based firm that operates a North American headquarters in Burlington, completed the acquisition of Utimaco Safeware AG for $341.8 million to go toe to toe with market leaders Symantec Corp. and McAfee Inc. And Sophos CEO Steve Munford said he plans to grow the company’s North American operations by up to 30 percent per year while winning market share with a suite of security tools.
“We’re here to inflict a world of hurt on Symantec and McAfee,” he said “You play to win.”
Of course, the main advantage of comprehensive suites is that they eliminate the need for customers to enlist multiple vendors. That preference is fueling a consolidation in the industry.
Last year, McAfee got its own encryption product when it bought Florida-based Safeboot Corp. for $350 million. (Boston private equity firm Summit Partners had held a majority stake in Safeboot since 2005.)
Earlier this year, Symantec began licensing and re-branding its encryption tool from California’s GuardianEdge Technologies Inc.
However, other local security vendors continue to target specialized areas of the IT cycle. For example, Waltham-based Black Duck Software Inc. checks open source software for licensing issues, and Burlington-based Veracode Inc. scans software for security problems. NetClarity Inc. is a network protection companyin Bedford, and Waltham-based V.i. Laboratories Inc. is developing anti-tampering and anti-piracy software.
In the endpoint security market — endpoint security meaning that each client device is responsible for its own security — Symantec (Nasdaq: SYMC) and McAfee (NYSE: MFE) have captured 25 percent to 30 percent apiece. Sophos, which unlike its competitors serves enterprise customers only, has garnered about 7 percent of that same market, said Arabella Hallawell, vice president of research for Gartner Inc.
While demand for endpoint security is growing, security is still a tough place to gain market share because IT departments typically play it safe by selecting established vendors, said Bradley Dinerman, president of the National Information Security Group and vice president of the MIS Alliance in Newton.
“The customers we deal with want a name they recognize,” he said.
Endpoint security is moving away from the reactive to the proactive, said Maria Cirino, founder of Boston-based .406 Ventures and former CEO of Guardent Inc. “There’s a need to migrate off the blacklist and onto a white list,” Cirino said. “I think there’s a revolution happening at the endpoint.”
Sophos, founded in 1985, employs 350 in North America. Germany-based Utimaco, also founded in 1985, employs about 50 from an office in Foxborough.
Sophos may continue to operate the two facilities separately, similar to the approach taken by Hopkinton-based EMC Corp. (NYSE: EMC) after it acquired Bedford’s RSA Security Inc. in 2006, Munford said. |
