It its continuing acquisition-fueled evolution from hardware purveyor to software and services juggernaut, storage-infrastructure giant EMC agreed to acquire RSA Security for slightly less than $2.1 billion on Thursday.
In announcing the acquisition, EMC’s CEO Joe Tucci said: “EMC is where information lives, and tomorrow EMC will be the company where information lives securely.”
Maybe Mr. Tucci is right, but he was peppered with questions from market analysts who felt the match between EMC and RSA was less than ideal and that EMC overpaid for the privilege of owning its latest corporate bauble. Tucci naturally defended the acquisition, arguing that it was essential for EMC to own RSA rather than allowing it to fall into the hands of dastardly competitors.
EMC has made some clever acquisitions in the past, but I don’t think this one was pursued for the right reasons. As such, I believe it will not produce the ROI Tucci envisions. The fact is, RSA had put itself up for auction a few months ago, hiring investment bankers to solicit bids from the known universe of candidate buyers. Doubtless other vendors were pursuing the company, and EMC got caught up in the competitive excitement of the auction proceedings.
Yes, storage networks should be secure, and EMC is right bolster its security credentials. Was RSA the best acquisition target EMC should have pursued from a value standpoint? Well, I don’t think so, but Tucci is paid the big bucks, and it’s his bet that will count and be scrutinized by EMC shareholders in the months to follow.