Analysis: RSA Deal Good For Shareholders, Bad For Industry - InformationWeek

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Analysis: RSA Deal Good For Shareholders, Bad For Industry

As EMC prepares to swallow RSA, the security industry will be watching with concern.

COLORADO SPRINGS, Colo. — They may be dancing in the streets at Certicom Corp. and other competitors of RSA Security, but the security industry can't help but respond with trepidation to EMC Inc.'s $2.1 billion offer to buy RSA.

EMC President Joe Tucci isn't even pretending to continue RSA's independent sales and marketing channels for crypto cards, firewall software and other public-key products. Instead, they'll be "integrated" with EMC's storage products.

The price may have been right for RSA, but where does that leave the company known for its chutzpah since it first commercialized the Rivest-Shamir-Adleman algorithms for public-key cryptography? RSA's annual conference was famous for bringing together the manufacturers of crypto chips, secure token cards and intrusion detection systems. Long before criticism of the National Security Agency was popular, RSA was famous in the mid-1990s for hiring cartoonist Tom Tomorrow to design posters lampooning the spy agency.

The "bad boy" image started to fade when RSA merged with Security Dynamics in 1996. By 2001, the annual conference had become a predictable polyglot. Key RSA executives left for startups like Reactivity Inc.

Ultimately, RSA's role in promoting public-key encryption cannot be duplicated by any other player.

Is security a key element of storage-area networks and storage subsystems? Undoubtedly. Do storage companies know how to sell security products? Saying "the jury is still out" would be an understatement.

RSA's public-key competitors don't need our advice to help with their ambulance-chasing, but they should still be at the forefront in working on common standards and promoting the security industry in an era of deep insecurity and troubling consolidation.

It's doubtful an EMC-owned RSA will be playing much of a role in either dimension.

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