EMC Acquires RSA Security

(Hopkinton and Bedford, MA) — EMC Corporation and RSA Security Inc. recently announced that EMC would acquire RSA. The aggregate purchase price of slightly less than $2.1 billion seems high since RSA is only generating annual sales in the $87 million neighborhood. Some people may question this move, but I don’t. I have been preaching how the convergence of storage and security will be the next big thing for both technologies, and with this acquisition, EMC is building a strong foundation in security.

Upon completion of the acquisition, RSA will operate as EMC’s Information Security Division, headquartered in Bedford, MA. In addition to instantly bolstering EMC’s security division, EMC most likely snatched RSA from the jaws of the likes of HP, Symantec, and even Microsoft — all companies rumored to have been interested in purchasing RSA.

Since EMC announced this acquisition, the company’s stock has dropped nearly 3%. Is that type of punishment really deserved? Probably not, since EMC has a proven track record of successfully and quickly leveraging acquisitions. Over the last two years, EMC has successfully merged with Legato Systems, Documentum, Dantz, Authentica, Smarts, Internosis, and Acxiom, just to name a few. Most recently, EMC acquired CDP (continuous data protection) company Kashya. The latest acquisitions make as much sense as any of the previous ones. How can you argue against adding CDP and security to EMC’s expanding portfolio? EMC’s credo is to provide ILM (information lifecycle management) solutions. Surely data security and data protection are critical components of that blueprint.

Rob Sadowski, Sr. marketing manager of information security for EMC, agrees, “Storage and security are two inseparable elements. Our customers have been asking for integrated security solutions in our storage products. Customers can’t maximize the value of their data if that data has become a liability. We view security is an intrinsic part of helping customers protect and leverage their data.”

 

How will this deal affect EMC and RSA VARs?

The acquisition is expected to be complete late in the third quarter or early in the fourth quarter of 2006. Prior to that, neither company is allowed to discuss how the products will be integrated, nor how the deal will directly affect channel partners. However, Sadowski did tell me that partners of both companies would have great opportunities. “EMC VARs will get common security functionality across all product lines,” he says. That functionality will most likely take the form of a common security management platform for EMC hardware. Sadowski continues, “For RSA VARs, we want to assure them that it will be ‘business as usual.’ EMC won’t make any changes to RSA as it exists. We don’t want to affect their current relationships or products. They will get the added benefit of EMC’s reputation and strength behind them.”

Joe Tucci, EMC’s chairman, president and CEO, says, “This acquisition signals a fundamental change in the landscape of the security market.” I would add that this acquisition signals a fundamental change in the landscape of the storage market as well. Storage vendors have to start forging security into their solutions, not just at the component level, but also in a federated (single sign-on) fashion, or one of their competitors will. The same goes for VARs. If you think your customer’s data security is someone else’s problem, it’s likely that your customer may soon become someone else’s. Your challenge as a VAR is to position your company to get the most from the convergence of storage and security — just like EMC has with its RSA acquisition.

Chris Loringer is the network security and storage technologies editor for Business Solutions magazine. He can be reached at chrisl@corrypub.com. To read his online opinion column, go to www.BusinessSolutionsMag.com.