Daily Archives: October 20, 2006

Symantec Rumored to be Acquiring Vontu for DLP

With McAfee having announced the $20-million acquisition of Onigma Ltd., a privately held Israeli provider of data loss prevention (DLP) software and services, other major security players also are looking to make DLP acquisitions.

DLP is a fast-growing segment of the security market concerned with monitoring, managing, and preventing the leakage of confidential information from enterprises and governments.

Some DLP solutions are deployed at the network perimeter, intercepting sensitive outbound content by using a lexicon database or a hashing system, while others are deployed on host computers, monitoring not only what data leaves the computer over the network but also checking to prevent restricted downloads, whether over the network or from USB storage keys.

One of the early leaders in the DLP space is Vontu, which had aggregate financing of about $25 million as of 2005. According to industry rumor, Vontu is the DLP company that security-market leader Symantec has targeted for acquisition.

Vontu and Symantec have a pre-existing relationship that extends back more than a year. More recently, Vontu has licensed DLP technology to Symantec that will be included in a new Symantec product, Premium Content Control, which will be delivered as part of the Symantec Mail Security (SMS) 8300 appliance, scheduled to be generally available generally on October 31, 2006.

The rumored acquisition might not occur immediately, but there’s enough buzz to suggest it is likely to happen soon.

Arris Rumored to be Ready to Buy Concurrent

Concurrent Computer, an embattled vendor of video-on-demand (VOD) systems, announced back in July that it was amenable to takeover offers.

If rumors toward the end of this week are to be believed, Concurrent might have found a buyer in its most likely suitor, Arris Group Inc.

The VoD-server space is consolidating, and Concurrent’s technology would find an obvious home in the Arris camp. Arris has the means to acquire Concurrent, whose VOD-system capabilities would fill a hole in Arris’ product roster for MSO’s and other broadband service providers.

Although Arris itself was an acquisition candidate, for now the company appears to be a buyer rather than a seller.

Extreme CEO Understands Cisco’s Competitive Threat

Named president and CEO of Extreme Networks Inc. this summer, former Sun Microsystems executive Mark Canepa is grappling with an internal investigation into past stock-option granting practices at the company, which also is facing NASDAQ delisting for delaying its year-end financial filings.

In an interview with Computerworld, however, Canepa doesn’t seem concerned about the outcome of the stock-option probe or about the threat of delisting. He believes both matters will be addressed satisfactorily, and he says customers’ buying decisions are unaffected by them.

As a primarily enterprise-oriented data-networking company that competes regularly against networking powerhouse Cisco Systems, Extreme has gained useful insight into how open systems, technology partnerships and alliances can function as a bulwark and as essential differentiation when you’re fighting against an industry behemoth.

Says Canepa:

We all operate in the shadow of a Cisco. It means you have to differentiate and be nimble. Cisco may be large, but they have lots of different product lines that may be incompatible with one another. We’ve built our company around a single system that’s open. We have a very sophisticated XMLinterface and a set of APIs that make it very easy for a partner like Avaya to closely build in an application environment. That’s key when you’re a $400million company like us. The trick is to apply what you are really good at into markets where you can make a difference, and get there before Cisco.

That’s a good recipe for success against Cisco as I’ve seen. It’s one that F5 Networks used to good effect as it built itself into the market leader in application-traffic management, and it’s an approach that Extreme will attempt to execute in its ongoing battle with Cisco in secure, high-speed, converged enterprise networks.

Extreme needn’t become a market leader to survive and prosper; it just needs to become a credible converged-network alternative to the top dog.

How Francisco Partners Might Engineer a Security IPO

This is all just Friday-afternoon speculation on my part, so bear with me, but I can see the outlines of how Francisco Partners could potentially engineer an IPO (or perhaps an acquisition by a larger public player) by combining two security companies in which it holds ownership stakes.

Francisco is the sole owner of WatchGuard Technologies, whose products include unified threat management (UTM) security appliances, SSL VPN gateways, management software, and services and support. Francisco also owns a minority piece of low-end spam-firewall market leader Barracuda Networks.

While Barracuda has other products, including a web firewall and an IM firewall, it made its mark in addressing the anti-spam and email-hygiene requirements of SMEs.

Interestingly, WatchGuard attacked the same markets, first with its SSL VPN offerings and now with its UTM products.

There isn’t a lot of overlap between WatchGuard and Barracuda, and some of the latter’s technology would integrate attractively into WatchGuard’s UTM architecture. What’s more, it’s clear the UTM value proposition — being able to address multiple security threats in a single firewall platform — does resonate with resource-constrained smaller businesses.

A combination of WatchGuard and Barracuda could be enough to sustainably differentiate and hold ground competitively in the SME space against players such as Microsoft, SonicWall, Symantec, McAfee, and SecureComputing (which now owns email-security appliance vendor CipherTrust).

It might also be a means to an IPO, which Barracuda is unlikely to attain on its own merits. The inbound email-security space is just true crowded and too uncertain, and Barracuda, still as something of a one-trick pony, is extremely vulnerable to competitive incursions by bigger players.

The question is, will Barracuda’s major investor, Sequoia Capital, feel inclined to go along with such a scheme. It might, but, then again, it might not.

One thing is certain: Francisco partners bought WatchGuard with a view to turning a profit, just as Sequoia invested in Barracuda with the intention of realizing a return. Necessity might be the mechanism that brings Francisco and Sequoia together to strike a deal that brings together Barracuda and WatchGuard as comprehensive security vendor for SME customers.

Adobe Builds on Flash Momentum with Acquisition of Serious Magic

Abode Systems is building its Flash platform into a multipurpose, multimedia, font of embedded real-time interaction.

It took another step in that direction yesterday with the acquisition of Serious Magic Inc., a  maker of video software and communications tools for creative professionals, businesses, consumers, and education markets. Among Serious Magic’s products are DV Rack, for extending direct-to-disk recording and monitoring into the field, and Visual Communicator and Vlog It, which provide video communication to general business users and casual bloggers.

Said John Loiacono, senior vice president of Creative Solutions Business Unit at Adobe:

“The huge momentum behind Flash Video, which is powering everything from online TV shows to YouTube and MySpace, is turbo-charging Adobe’s video business. The purchase of Serious Magic accelerates our vision to make, not just video but all dynamic media, an even more ubiquitous communications vehicle, whether you’re delivering content for the broadcast market, over the web or on mobile devices.”

It’s typical post-acquisition marketing hype, yes, but there’s some truth to it. I also know that Adobe is doing some interesting things internally to fuse SIP-based VoIP, IM, and even P2P capabilities into Flash.

Microsoft, for one, ought to be concerned about the growing applicability and range of Flash.

Aladdin Shakeup in the Works?

As Elinor Arbel writes at TheStreet.com, trillion-dollar hedge fund BlackRock now owns about 13.5 percent of Israel-based security-software concern Aladdin Knowledge Systems.

Considered a leader in the software digital rights management (DRM) market, the company’s financial performance has faltered in recent quarters. Sales have slowed, with many analysts blaming volatile management rather than weakening market demand for the slide.

All of which has increased the speculation, if not the likelihood, that BlackRock might intervene to overhaul Aladdin’s executive management.

The time is right for a change at the top at Aladdin. The company has suffered vertiginous turnover in recent quarters — never a hallmark of organizational stability or a harmonious corporate culture — and OEM and licensing agreements with VeriSign and RSA Security (now part of EMC) were discontinued or severely modified so as to make them "insignificant to the bottom line," according to Ehud Eisenstein, an analyst at Oscar Gruss.

Perhaps BlackRock will do more than push for a change in executive management. It might make a serious bid to take Aladdin private or to sell the company to a larger public player assembling an end-to-end security product portfolio during the current wave of market consolidation.

In the past, Aladdin’s founding brothers, Yanki and Dany Margalit, sought to control nearly every aspect of the business. Their hold on power is easing, however, with new managers ascending the corporate hierarchy and influential investors such as BlackRock pushing aggressively to hasten the pace of change.

A shakeup of the company’s relatively clubby board could be next.