Deal: McAfee gets more "Secure"

McAfee is proving itself to be the most astute buyer out there in security land. For less than $500 million, they acquired Secure Computing this morning and are now back in the network security business. Pete Lindstrom goes through the weird chronology and I'm thankful that there are other guys in this space as long as I've been - so I don't have to remember everything.

Secure Computing has been struggling. You only need to look at the stock chart over the past year to see that. They were caught in no-man's land. Not big enough to do real deals (Securify is not a real deal), but too big to be nimble or easily acquired. Not at close to a billion dollar valuation (which is where they were only a few months ago) anyway. But at half a billion, a deal become just a matter of time.

Alan points out that things started to turn to the negative for Secure once they bungled the CyberGuard acquisition. And before that deal was even through the alimentary canal, they totally over-leveraged themselves with the CipherTrust deal. McNulty got tossed and Dan Ryan (the new CEO) was faced with rebuilding. The stock got hammered and basically it was going to be a long steep climb back up.

Then McAfee came a knocking, and getting out is probably exactly what the board and the executive team saw as the only feasible option. It seems Dan Ryan is going to stick around and "run" the network security business, and we'll see how much (and who) else decides to stick around.

What's in it for McAfee? Well besides buying more revenue at a good value, they are also filling out the product line. Beside IntruVert (the enterprise IPS product), McAfee had very little exposure to the network security market, so there is very little overlap. Secure brings a bunch of firewalls/UTM devices and the email security gateway (CipherTrust's IronMail).

But the real gem here is Webwasher. McAfee's product in the web gateway space was poor and Secure's is a market leader, and this market continues to grow at a decent clip. McAfee will also try to make a big deal about TrustedSource (Secure's content reputation service), but it's not that novel anymore. Everyone has a reputation service nowadays.

For a long time, UTM and other network security words were counter to McAfee's positioning. But ultimately how can you say you are a legitimate enterprise security provider without having competitive offerings for securing the network? I could make the same case for Symantec (after they moved their gateway business over to Juniper a few years back). Basically you can't, so the pendulum will keep swinging back and forth, as technologies get spun out and subsumed again.

The channel synergy will be pretty good as well. Secure was having a hard time keeping enterprise-class sales folks, so having a lot more to sell and being more competitive will certainly help both retain and recruit better folks in the field. McAfee may also be able to revive the CyberGuard business, given it's mid-market distribution engine. Existing McAfee reps and channels get access to new product lines that can only broaden the value they offer for customers.

And let's not forget the US Feds. They are spending money like it's going out of style, or had been anyway before the Treasury wrote a trillion dollar check over the weekend. Secure had a good position in the Government market and McAfee is pretty strong there too. Definitely synergies in one of security's growth markets.

Of course, synergy on paper doesn't mean a lot until integration and execution happens. Secure Computing proved that many times, so the jury is really out on this deal, but given the price and lack of product overlap - it looks pretty good at first blush.

Photo: "Fish eat fish" originally uploaded by clara