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Symantec Plans to Acquire Blue Coat Systems For $4.56 billion
Jun. 13, 2016 10:16AM PST
Defence and Security Investing
The Wall Street Journal broke news today that Symantec plans to acquire Blue Coat Systems, Inc. for $4.56 billion. Symantec will gain a new CEO with the acquisition.
By Steve Morgan, founder and CEO at Cybersecurity Ventures.
The Wall Street Journal broke news today that Symantec (NASDAQ:SYMC) plans to acquire Blue Coat Systems, Inc. (NASDAQ:BCSI) for $4.56 billion. Symantec will gain a new CEO with the acquisition.
Greg Clark is CEO and sits on the board of directors at Blue Coat. He will become CEO of the combined companies once the purchase is complete. Clark told the Wall Street Journal that “there’s virtually no product overlap between Blue Coat and Symantec”. His comment should be of grave concern to Symantec’s shareholders, employees, and executive management — not to mention the media and cyber market watchers.
The first thing that jumps off the websites of the two companies is product overlap. Most large cyber firms have some sort of ‘security platform’ to describe their product and service offerings. These platforms are often more of a logical description of the point products a company offers, rather than any true integrated operation between the products. Sometimes there is integration – or there can be a dashboard which provides a view into each of the products. Regardless, the platform is a singular marketing view of what a company provides.
The Blue Coat Security Platform consists of the following categories:
- Advanced Web & Cloud Security
- Advanced Threat Protection
- Encrypted Traffic Management
- Incident Response, Analytics & Forensics
- Protecting Web Applications
- Network Performance & Optimization
Symantec’s products (sans a platform as of yet) are as follows:
- Threat Protection
- Information Protection
- Cyber Security Services
- Website Security
Symantec’s new CEO is making a potentially irrevocable blunder if he stands behind his assertion that there’s no overlap between the two firms. It will beg researchers, analyst firms, and the financial media to dig deep into each category by company (i.e. malware, encryption, etc.) and line up the product overlaps.
A little digging here to back this up. ‘Threat protection’ is a major category where both companies play. Symantec’s Threat Protection provides software that defends against cyber threats on embedded systems, mobile devices, desktops, servers, gateways, and the cloud. Endpoint protect, email security, and IoT security are key components of their threat protection offerings. Blue Coat’s Advanced Threat Protection similarly protects several of the same categories.
The email security category provides an even more granular look at the two companies and where they overlap. Symantec’s website states “e-mail is the lifeblood of many organizations, and also one of the most common points of entry for today’s targeted attacks.” Symantec offers an email security in the cloud solution, or one that corporations can employ in their own data center — and protects Office 365, Google Apps, and other email apps. Blue Coat’s website states that “mail is still one of the most-exploited attack vectors, yet in the face of this fact, very little innovation has been delivered by vendors focused on securing the email environment.” The Blue Coat Mail Threat Defense is also a cloud or premise based email security solution which protects Office 365, Google Apps, and others. The two companies compete head-to-head in email security — and they will have to figure out the product overlap, post-acquisition.
The whole point here is less about product overlap, and more about Symantec’s new CEO and his ability to communicate an accurate and clear message to the market. Clark has told a major media outlet that there is virtually no product overlap between Blue Coat and Symantec. If he lets that statement stand, then it begs interrogation which can be messy. Or, he can issue a follow up statement clarifying the product overlaps and how the two companies will integrate.
To be sure, the IT analyst firms and media are all ears on this one.
I, Steve Morgan, hold no direct investment interest in any company mentioned in this article.
Steve Morgan is founder and CEO at Cybersecurity Ventures and Editor-In-Chief of the Cybersecurity Market Report. Visit SteveOnCyber.com to read all of my blogs and articles covering cybersecurity. Follow me on Twitter @CybersecuritySF or connect with me on LinkedIn. Send story tips, feedback, and suggestions to me here.
