Security proving to be a fruitful area for investment

The technology landscape is changing fast, bringing much disruptive change that provides organisations with new ways to streamline their businesses, reach out to customers more effectively and keep their workers productive. Among the hottest trends are cloud computing, software as a service, big data and mobile security. Within these sectors, many security technology vendors are showing a great deal of innovation – leading to a flurry of acquisitions and investments recently.

As with most areas of the technology sector, the security technology sector is characterised by a few large players and a range of innovative smaller players. In recent years, those larger players have been acquiring specialists to build out their portfolios. McAfee, which itself was acquired by Intel Corporation in 2010, has made investments in the mobile security space, and in the security information and event management and database security sectors, which will allow it to expand its capabilities in real-time big data analysis. It has also been integrating its Intel and McAfee product lines to allow it, among other things, to enter the identity management space. Symantec has also made a number of acquisitions to expand its capabilities in ediscovery and archiving, authentication and mobile security. IBM introduced its Advanced Threat Protection platform in April 2012, incorporating assets from its acquisition of Q1 Labs and of Internet Security Systems. It has recently brought all of its security activities together into a separate security unit and has announced a focus on cloud services, mobile security and big data.

There has also been a great deal of investment activity among smaller, specialist companies that shows just how dynamic the security technology sector is currently. The following are just a few of the most noteworthy examples seen recently. Barracuda Networks, which offers a broad portfolio of content security, data protection and application delivery subscription-based products, received funding of $130 million in October 2012 and, according to Bloomberg, is eyeing an IPO. Cloud security provider Qualys has successfully undergone an IPO, raising a little over $70 million in September 2012, proving the viability of its model. Another candidate for an IPO is email security and archiving vendor Mimecast, which received $62 million in funding in September 2012. Application control vendor Bit9 received $34.5 million in July 2012 and cloud security vendor Zscaler $38 million in August 2012.

Deals such as these show just how important the security technology sector is and point to the high levels of innovation that are being seen. That innovation is bringing disruptive change – not just in terms of the security technology available to organisations that deploy such technology, but in the overall vendor landscape. There will be more to come.