Gigamon’s ICEBRG acquisition just tip of the iceberg – more M&A to come, says CEO

Network and security company Gigamon has announced its acquisition of threat detection startup ICEBRG.

Financial details of the deal were not disclosed, but previous disclosed investment in ICEBRG comes to $12.5 million, and Reuters reports that “sources familiar with the matter” claim the company has been valued at around $100 million.

ICEBRG’s next-generation software-as-a-service solution uses sensors to stream network traffic metadata into a cloud-based platform, providing SOC teams with automated detection capabilities, increased visibility, and easy-to-use APIs.

According to Gigamon CEO Paul Hooper, the deal gives Gigamon – primarily a networking company – more cybersecurity expertise, and “takes it more into the world of subscription software.”

There will be more acquisitions. The valuations in security are starting to get more realistic.

– Paul Hooper, CEO, Gigamon

“The market is primed for a new approach to enterprise security that reduces risk, lowers cost, and increases leverage for SOC teams,” said Hooper. “Building on our success supporting Mobile Service Providers with a visibility solution, we see a similar opportunity to disrupt the security market with the addition of ICEBRG to the Gigamon Platform. This combination provides a compelling new way to enable Security Operations professionals to regain the upper-hand.”

According to Hooper, the ICEBRG deal marks the start of a new M&A strategy.

“There will be more acquisitions,” he said. “The valuations in security are starting to get more realistic.”

We recently discussed tech companies’ valuations, including cybersecurity companies – Mad Money’s Jim Cramer cautioned that their “sky-high” valuations, though exciting, were likely setting investors up for failure. Hooper’s statement suggests that might be changing.

We are excited to join Gigamon, a company that shares our vision and desire to reshape the security market.

– William Peteroy, CEO and co-founder, ICEBRG

As part of the acquisition, the ICEBRG team (including co-founders William Peteroy and Josh Carlson) will be joining Gigamon, though how precisely they will fit into the organisation’s structure has not yet been announced. Hooper also revealed that Gigamon will be adding a third research and development centre in Seattle.

“We are excited to join Gigamon, a company that shares our vision and desire to reshape the security market,” said William Peteroy, CEO and co-founder of ICEBRG. “The combination of the high-quality network data from the GigaSECURE® Security Delivery Platform and the ICEBRG cloud-based platform will power the next generation of security capabilities. Together, our expertise in networking and security will help SOC teams focus on defending against the most severe threats in their environments.”

The acquisition reflects two of the big trends we’ve been observing in the cybersecurity space.

The first is increasing consolidation in the marketplace. As Gigamon’s press release points out, one of the problems cybersecurity practitioners are struggling with is vendor sprawl, in terms of oversized security stacks and in terms of the sheer size of the market. M&A acquisition has been increasing, with larger companies buying up rivals and startups to improve and expand their own offerings. Cisco, for example, has acquired 29 companies since 2015, approximately 2/5 of which are explicitly security-related, and most (if not all) of which have potential security applications.

One estimate puts the number of distinct solutions that a CISO might work with for a single project as high as 80 – and while some remain cautious about ceding control to MSSPs, the appeal of reducing that number (and therefore costs and complexity) without sacrificing security is significant.

The second trend, which is inherently related to the first, is the growing number of tech and networking companies branching out into cybersecurity. Cisco and IBM are particular examples of this, and though some may still think of them as hardware providers first, in markets such as the Middle East in particular their reputation for security is just as strong. Other companies to diversify in this way lately include AT&T’s recent acquisition of AlienVault, SK Telecom’s strategic investment in ID Quantique, and Verizon’s acquisiton of Niddel.

The move towards consolidation is certainly needed. The cybersecurity vendor landscape, as it is, is difficult to navigate effectively. Startups still have a chance to break into the big leagues – Carbon Black, Cylance, Darktrace and more have all proved themselves capable of holding their own – but it’s rare. Though competition keeps the market healthy, acquisition and absorption may be the most realistic way of ensuring new innovations aren’t just lost in the rat race.

Researcher, writer, recovering medievalist. Currently particularly interested in the cybersecurity solutions market, cyber insurance/risk modelling, and IoT security.

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