Sophos to buy Utimaco

Sophos has recently made a $342m bid to purchase Utimaco,
the German data security company that focuses on data loss prevention (DLP) and
data encryption.

The proposed deal is still shrouded in legal mystery due to
the various company law regulations applicable to Utimaco as a German company
so executives have little if anything they can say openly.

Does this deal make sense for Sophos and Utimaco?

Certainly Sophos could do a lot worse than purchase Utimaco.
The product portfolio available from Utimaco is well respected and has done
well in the recent series of reports undertaken by Bloor Research. It is probably only the fact that Utimaco is firmly
entrenched as a European company that has prevented others from making a
similar approach. The reality is that US companies prefer to purchase other US
companies in areas such as security.

It is also good to see Sophos stirring from its slumbers and
deciding to wade into the data loss prevention and encryption market, albeit 18
months later than they should have done. I have a lot of time for Sophos but
for too long have seen them, rightly or wrongly, as a good
anti-spam/anti-malware vendor and little else. The purchase of Utimaco will
give Sophos the chance to play with the bigger boys in the world of DLP, but
they will have some catching up to do. Utimaco’s strong presence in very large
enterprises will be an asset to Sophos as will the Sophos management tools to
Utimaco.

The Symantec acquisition of Vontu is now complete and the
Vontu DLP people are fully part of team Symantec, so expect to see even stronger
positioning from them. This acquisition will also continue to pile the pressure
onto McAfee who just announced the purchase of Reconnex, another respected player
in the DLP market. Execution is now the key battleground.

Expect to see more announcements from Utimaco/Sophos as the
deal progresses, with a final shareholder vote probably happening in the
October timeframe.