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AlertBoot offers a cloud-based full disk encryption and mobile device security service for companies of any size who want a scalable and easy-to-deploy solution. Centrally managed through a web based console, AlertBoot offers mobile device management, mobile antivirus, remote wipe & lock, device auditing, USB drive and hard disk encryption managed services.

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AlertBoot offers a cloud-based full disk encryption and mobile device security service for companies of any size who want a scalable and easy-to-deploy solution. Centrally managed through a web based console, AlertBoot offers mobile device management, mobile antivirus, remote wipe & lock, device auditing, USB drive and hard disk encryption managed services.

Data Encryption Software: Symantec Buys PGP and GuardianEdge Further Consolidating Data Security Industry

Today's big news in our industry is the acquisition of PGP and GuardianEdge by Symantec.  The two acquirees (that is a word, my spell-check notwithstanding) offer a number of data security products, and are competitors to AlertBoot in the drive encryption software arena.

The companies are being bought for $300 million and $70 million, respectively.  The deal is all-cash, according to Barron's and other sources.

On Going Consolidation Trend - PointSec and SafeBoot and Others

The above is the continuation of a consolidation wave in the data security industry that was started, as I recall, by the acquisition of PointSec by Check Point back in 2007.  The other merger of companies that comes to mind is that of SafeBoot by McAfee, an acquisition as well.  And, of course, the Sophos-Utimaco merger (AlertBoot is powered by Sophos's SafeGuard encryption).

In an internal discussion, it was point out by our CEO that this is just further proof on the importance of endpoint encryption, and that the market is poised for growth.

No argument there.  The importance of data encryption has always existed, but the downward pressure in the cost of computing hardware and software--triggered into overdrive in the Internet bubble era--meant that data security would need to go to the next level, sooner than later.

Not the "next level" in terms of technology, but in terms of adoption: Most homes didn't own a computer prior to 1995, but that's not the case today.  Most people didn't need to think, or even know, about data security 15 years ago; today, it's a different story.  Where technology in communications goes, data security soon follows.

Will The Merger Cause Problems?

As you may know, most companies don't successfully execute mergers and acquisitions, even if they're a friendly takeover.  It tends to work better for simple industries, like a candy company taking over a gum company.  Encryption and data security are not simple industries.

I've heard (all unconfirmed, of course) that there was plenty of talent fallout in the PointSec acquisition (despite of which, the acquisition became a great success, according to some).  McAfee had problems integrating SafeBoot encryption support for about a year or so, and supposedly is working on technical glitches to this day.  Both are testament that even the most complementary, matching technologies need some hashing out regardless of the level of professionalism and dedication.

Will Symantec experience similar problems?  It's been pointed out by ars technica that "both companies already have OEM partnerships with Symantec, so effective integration into Symantec's existing software line-up is likely to be unproblematic."

Perhaps so.  On the other hand, I've read my fair share of management case histories where it's pointed out that M&A failures are not just about technological matches, but also depend on organizational culture (behavioral as well as psychological), inter-office politics, etc.

You might be of the opinion that it's just all b-school hocus-pocus, but when I read that stuff, it tends to a ring bell.  The technology might be a great match, but if the people working on integrating that technology are focused on something else, like turf wars...well, I think expecting delays, problems, etc. is not unreasonable.

Plus, there is the fact that Symantec has acquired not one, but two, competing technologies that are being incorporated together to their platform.  I'd bet on the side of problems appearing: in the long-run, it's the winning bet, like that strategy for blackjack where you're supposed to hit on any cards less than 17.

How Does this Affect AlertBoot?

If you're concerned, first of all, thanks for caring.

Second, it's sort of a non-issue.  At the end of the day, PGP and GuardianEdge are not managed encryption services.

The key differentiator for AlertBoot encryption software has always been the fact that you can deploy laptop disk encryption over the internet without having to concern yourself with the associated overhead of typical disk encryption solutions, such as,

  • Buying extra servers
  • Getting a secure space, like a cage at a data center or a locked closet
  • Obtaining licenses that you or your company doesn't end up using because they don't have 50 employees (the 10 hot dogs, 8 buns mismatch strategy, I sometimes call it)
  • etc.

(By the way, if you're wondering what the 10-8 mismatch is all about, read this explanation.  I think it gets as close to the truth as anything I've ever read on the subject.)

Of course, Symantec could decide to become a competitor in the most direct way possible.  However, they would still face difficulties in building some of AlertBoot's value-addeds such as the integrated encryption reporting, which was pre-conceived as part of the product design process, whereas Symantec would still have to deal with legacy systems.

So, for the time being, we're feeling pretty comfortable since nothing has really changed out there.  I mean, does a desert fox care about global warming?  I know polar bears would, right off the bat.

In fact, a better question might be, with the acquisitions, where is the customer left?  For example, both PGP and GuardianEdge have clients who've taken up their respective disk encryption program offerings.  Will a particular set of clients have to re-encrypt their computers with a different solution?  And what will happen to PGP's open-source?  I'm sure answers will be forthcoming, but we'll also have to take a wait-and-see approach.


Related Articles and Sites:
http://arstechnica.com/business/news/2010/04/symantec-snaps-up-crypto-companies-pgp-guardianedge.ars
http://blogs.barrons.com/techtraderdaily/2010/04/29/symantec-to-buy-pgp-for-300m-guardian-edge-for-70m/

 
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About sang_lee

Sang Lee is a Senior Account Manager and Security Analyst with AlertBoot, Inc., the leading provider of managed endpoint security services, based in Las Vegas, NV. Mr. Lee helps with the deployment and ongoing support of the AlertBoot disk encryption managed service. Prior to working at AlertBoot, Mr. Lee served in the South Korean Navy. He holds both a B.S. and an M.S. from Tufts University in Medford, Massachusetts, U.S.A.