EMC Fills Major Security Hole With RSA - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


EMC Fills Major Security Hole With RSA

EMC's decision to spend nearly $2.1 billion for security vendor RSA promises to reshape the competitive landscape of the storage and infrastructure-management segments of the IT industry.

EMC's decision to spend nearly $2.1 billion for security vendor RSA promises to reshape the competitive landscape of the storage and infrastructure-management segments of the IT industry.

RSA is regarded as the leading supplier of encryption and integrated identity-management solutions, for which the company has a substantial partner ecosystem.

EMC will pay $28 per share for RSA, a 22 percent premium above RSA's closing price of $22.88 per share on Thursday. Overall, RSA's revenue growth has been flat--2005 revenue was $310 million, up from $307 million a year earlier--though profits grew more than 20 percent, to $42 million for the year.

CEO Joe Tucci expects RSA to be a $500 million business in 2007.

"We absolutely believe inside the EMC family that will grow up from there," Tucci said in on a Webcast Thursday evening announcing the deal.

In a research note by Robert Baird & Co., analyst Daniel Renouard wrote, "Although pricey, we believe [this] purchase fills a meaningful technology gap." Baird said it is maintaining its outperform rating for EMC in wake of the deal.

Noting security and storage typically rank among the top two priorities of customers, EMC is certainly not the first to come up with the idea of bringing better security to stored data. Last year, Network Appliance and Symantec made similar moves to bridge security and storage with their acquisitions of Decru and Veritas, respectively. CA and IBM also have broad portfolios to bridge the two together.

At its analyst conference in New York earlier this month, Tucci defined security as one of EMC's five key growth opportunities he envisioned as billion-dollar businesses. The other four: its VMware infrastructure virtualization business, content management, resource and network management, and storage virtualization.

While it was relatively clear that the other four businesses were on a path to reach that goal, it was not clear how EMC was going to get there with security. Nevertheless, Tucci promised security would encompass everything EMC does across all of its offerings.

With stolen tapes and laptops and other system compromises becoming a huge concern among all businesses and governments, the convergence of storage and security was never a question of if, but how.

"The mandate is clear by our customers," Tucci said last night. "We need to make sure the information itself is protected. We need to make sure it can be encrypted. We need to be able to encrypt at rest, in-fight, online, on disk, on tape across networks -- in other words, wherever digital information lives."

Tucci added that EMC needs to do that with centralized key management software, identity-management control and authorized access to that information.

"These are the things that RSA brings to EMC," he said.

RSA will become the security division of EMC, which will be headed by Art Coviello, RSA's president and CEO. EMC prides itself on its track record of retaining key executives and technical expertise of companies it acquires.

During last night's call, Coviello said the deal will let RSA fulfill its vision with the resources it lacked as a standalone company.

"We will be able to continue to fulfill our vision of protecting online identity and digital assets while leveraging the financial strength of EMC," he said. "More important [is] EMC's solution and expertise in information lifecycle management."

ANALYSIS: EMC Shifts the Security/Storage Landscape

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2021 State of ITOps and SecOps Report
2021 State of ITOps and SecOps Report
This new report from InformationWeek explores what we've learned over the past year, critical trends around ITOps and SecOps, and where leaders are focusing their time and efforts to support a growing digital economy. Download it today!
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

Becoming a Self-Taught Cybersecurity Pro
Jessica Davis, Senior Editor, Enterprise Apps,  6/9/2021
Ancestry's DevOps Strategy to Control Its CI/CD Pipeline
Joao-Pierre S. Ruth, Senior Writer,  6/4/2021
IT Leadership: 10 Ways to Unleash Enterprise Innovation
Lisa Morgan, Freelance Writer,  6/8/2021
Register for InformationWeek Newsletters
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll