Dell Technologies has entered into a definitive agreement to sell RSA for $2.075 billion to a consortium led by Symphony Technology Group, Ontario Teachers’ Pension Plan Board and AlpInvest Partners.
The purchase includes RSA’s solutions and services divisions, which serves 30,000+ organisations, as well as RSA Conference.
“This is the right long-term strategy for Dell, RSA and our collective customers and partners,” said Jeff Clarke, Chief Operating Officer and Vice Chairman of Dell Technologies. “The transaction will further simplify our business and product portfolio. It also allows Dell Technologies to focus on our strategy to build automated and intelligent security into infrastructure, platforms and devices to keep data safe, protected and resilient.”
The move doesn’t come as a massive surprise – Dell divesting some of its security assets has been on the cards for some time.
The company still has a significant amount of debt to pay off from its $67 billion acquisition of EMC (then RSA’s parent company) back in 2016, and between Secureworks, RSA, and VMware’s security offerings, Dell’s current security portfolio features a not-insignificant amount of overlap, as well as a lack of distinct identity.
The strategies of RSA and Dell Technologies have evolved to address different business needs with different go-to-market models
Jeff Clarke, Chief Operating Officer and Vice Chairman, Dell Technologies
Last year Dell was reported to be in talks to sell off Secureworks, one of its other security-focused divisions, though in December Bloomberg reported that it had changed direction and was now intending to buy out its outstanding shares instead.
Dell’s full year report for the fiscal year ending February 2019 showed VMware’s revenue up 14% year-on-year, and quarterly reports since then have seen its revenue continuing to grow quarter-on-quarter by between 11% and 13%. VMware has also been growing its security portfolio recently, and earlier this year spent $2.1 billion to acquire next-generation endpoint security specialist Carbon Black. A significant part of the messaging for ‘The VMware Carbon Black Cloud’ since then has focused on providing “one platform for your endpoint security needs” – and with cloud-based services and consolidation both being high on the CISO’s agenda at present, this is likely to resonate.
VMware also offers a number of point products offering ‘best-of-breed’ functionality – VMware AirWatch, for example, has been repeatedly recognised by participants in AKJ Associates’ in-house research as a leader in the mobile security space. This puts VMware in a strong position to target organisations which want best-of-breed functionality and have the resources to manage multi-vendor security stacks in-house, while also offering the convenience and efficiency of reducing the number of discrete vendors to relationship-manage.
Secureworks, on the other hand, is primarily defined by its Managed Security Services offerings, a market which is currently experiencing rapid growth as more and more organisations turn to outsourcing in order to compensate for the cybersecurity skills gap. SMEs in particular are realising that compared to the cost of maintaining an in-house team with the numbers and expertise required to achieve basic levels of cybersecurity, outsourcing security wholly or in part is likely to offer greater security for spend.
RSA’s product portfolio (RSA Archer, RSA NetWitness Platform, RSA SecurID, and RSA Fraud and Risk Intelligence) overlaps with both, and in as far as a particular identity stands out, its focus on risk management is somewhat at odds with Dell’s more straightforward technology-driven brand.
“The strategies of RSA and Dell Technologies have evolved to address different business needs with different go-to-market models,” said Clarke. “The sale of RSA gives us greater flexibility to focus on integrated innovation across Dell Technologies, while allowing RSA to focus on its strategy of providing risk, security and fraud teams with the ability to holistically manage digital risk.”
Given the global reach RSA has via its Conference division, it’s in a reasonably solid position to build out its own brand separately, which seems to be the plan.
“As one of the world’s elite security brands, RSA represents a great opportunity for solving some of the rapidly developing customer challenges that go along with digital transformation,” said William Chisholm, Managing Partner at Symphony Technology Group.
“We are excited and fully committed to maximizing the power of RSA’s talent, expertise and tremendous growth potential and continuing RSA’s strategy to serve customers with a holistic approach to managing their digital risk.”
