Symantec buys Vontu – The Good, The Bad, and the Yellow

CUPERTINO, Calif. – Nov. 5, 2007 – Symantec Corp. (Nasdaq: SYMC) announced it has signed a definitive agreement to acquire Vontu, the leader in Data Loss Prevention (DLP) solutions, for $350 million, which will be paid in cash and assumed options. The acquisition is expected to close in the fourth calendar quarter of 2007, subject to receiving regulatory approvals and satisfaction of other customary closing conditions.

The good: DLP is a nascent market but experiencing a tremendous amount of hyperbole. Driven by increased breach disclosure and sophisticated attacks organizations are moving to gain visibility and control over the information in their organization. Vontu provides a network DLP/CMF offering and this allows Symantec to enter the DLP space in the face of the DLP feeding frenzy.

The Bad: In 2006 Symantec announced that it would EOL its SGS, SNS, and SEF line of network security appliances. Symantec never focused on Network Security and their products were consistently weak compared to the competition. Vontu’s strength is in their network appliance offering which presents a challenge to Symantec as they move to integrate DLP into their product suite. As the DLP market matures it will become an integral part of other technical controls, it is unrealistic to think that data security, especially as it is implemented as a network control, would be maintained separately from other forms of network security controls – Symantec is in a poor position to provide a converged network security market offering and this will limit the success of Vontu as the market evolves.

Vontu also has a relatively immature and weak end-point DLP offering and with the average organization maintaining fewer than 20 percent of its employees at its headquarters location, the distributed enterprise has become the norm. Putting personnel closer to the business front lines and equipping them with mobile devices has changed how the enterprise operates. Further, critical business process functions are being off-shored at an increasing rate. As employees, contractors, suppliers and other stakeholders access and handle corporate data from remote locations and on the road IT manages more devices not under their direct control or traversing the corporate networks than ever before. While the structure of today’s organization creates new opportunities for efficiency and better customer service, it also creates greater opportunities for data leaks and loss. Symantec has acquired a poor end point DLP solution and lacks strong central management capabilities and will face challenges selling DLP to the enterprise desktop and integrating the technology into their end-point security offering

The yellow: Symantec has one of the worst records of integration in the security industry. They only recently released Hamlet, which is their integrated end point security technology. Hamlet is a convergence of Sygate, Symantec, and Whole security in a single agent and it only took them 2-3 years to accomplish what the competition has been offering since 2005. Not to mention that Symatec is still reeling from integration issues with Veritas, Bindview, Altiris, and the long string of end-point products that have had some yellow paint slapped on them accompanied by an updated price sheet sent out to the filed but lack any real integration.

Symantec will struggle to provide a converged network security offering (Vontu is yet another network security device) since they do not own any of the other pieces, except gateway email security and Vontu’s end-point DLP offering is not strong enough to impact the market. All in all this is an expensive purchase for two companies that are only aligned because they exist in the large, amorphous and increasingly inadequate security market.

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