Advisory on Dell Announcement to sell RSA Security
On 18th February 2020, Dell announced that it was selling RSA for USD 2.075 billion in cash to a consortium of investors led by the Symphony Technology Group. The consortium also includes Ontario Teachers’ Pension Plan Board and AlpInvest Partners. The announcement follows from the rumours in November 2019 of Dell wanting to sell the RSA unit it had obtained as part of its EMC purchase in 2016. EMC had acquired RSA in 2006. This deal includes RSA Archer, RSA NetWitness Platform, RSA SecurID and RSA Fraud & Risk Intelligence units as well as the RSA security conference (held each year in San Francisco). The deal is subject to regulatory approval and is expected to close in six to nine months.
TekPlus believes this deal is positive for all parties.
Recently, RSA has taken an approach to help its customers to holistically manage digital risk, which fits well with it’s vision of ‘business driven security’. We believe RSA Security and its executive team have homed in and clarified their direction towards leading in the Digital Risk Management space and have spent significant time repositioning the company, its solutions and its research investment to enhance its capabilities. The vendor expects the digital risk segment will be a large piece of any future security and compliance market, especially given the current market mantra about ‘digital transformation’. As the organisations embrace digital transformation technologies and processes, digital risk is bound to elevate. This deal will hopefully give RSA the freedom not to worry about being aligned with Dell’s vision and strategy but to position itself as a holistic over-arching Digital Transformation security enabler across an enterprise especially for Digital Risk Management, Compliance and Cyber Risk. The positioning will be higher up the value stack. RSA is in a position to execute a totally different go-to-market which hopefully is a mixture of its existing channel strength with new ‘as-a-service’ offerings.RSA will now be in a position to play the vendor neutral card fully and pick eco-partners based on good longer term visions. One downside is more on the marketing front if the RSA guys haven't fully absorbed from Dell marketing. They have six months to get some of that Dell marketing vibe!
Longer term, RSA was on a collision path with Dell’s overall security play. Their visions were moving in different directions as recently observed with VMWare’s deal for Carbon Black.There is also Secureworks. Dell in DigitalTransformation is more focused on the new infrastructures and platforms. Here it wants to leverage AI, automation, data storage and security in the processes, containers and the platforms which will need to be differentiated from its rivals. This is a totally different business and go-to-market model. Additionally the deal will also give cash to Dell to ease its debt paydown for a better grade rating. Dell will still have a good eco-partner for its client base.
Symphony Technology Group (STG) and its partners are doing exactly what so many other equity firms have done recently in buying into the security segment. Hopefully, they may be in a position to buy a few more companies required by RSA for leadership into the new segments, focus on efficiencies and the right go-to-market models as well as leveraging the RSA brand to its maximum. It will provide RSA the needed breathing space as well as some more drive!
|√ This is a good deal for all parties.|
We believe RSA will now be able to create the right new product segments specifically to help customers manage digital risk. RSA already has competencies in integrated risk management and cybersecurity and this should now be focused on investing and strengthening its capabilities significantly in the digital risk management solutions space. The company is modernising its Archer solution to become the heart of its digital risk management cloud platform that is loosely coupled with its other components and solutions utilising APIs and microservices. STG and partners should provide RSA with some breathing space to vision and map its leadership position in the digital world whilst driving and executing on the right business and go-to-market models for a holistic position higher up the value stack.
Advice to customers:
RSA is well positioned in the security and risk management markets. They have more than 30,000 customers worldwide and over 400 global technology partners. Their customers include 94 percent of the Fortune 500. RSA is said to be committed to its customers, employees and partners in a bid to help their customers with a holistic approach to manage their digital risk.
- If you are already a client of RSA and thinking about transforming, you need to raise questions on the overall timescale for updating solutions, will the future roadmap still remain the same, what sort of stability will the new owners provide - both financially and in managing?
- If you are a heavy EMC/Dell infrastructure end user, we believe you will not be affected significantly in the shorter term unless you’re transforming in the near future. You will need to ask questions about RSA solutions that currently inspect deeper into your infrastructure as well as your new compliance needs. We believe the Dell-RSA partnership will still be strong and hence the impact will be less
- If you are a new customer, we believe you should ask more information on how RSA will look at digital transformation, especially in terms of ‘a holistic platform based on Microservices and APIs architecture’.
Executive Brief: Managing Digital Risk
Guidance Report: Digital Transformation Framework
Advisory: Ensuring Cyber Resilience (Coming Soon)
Advisory: Security Directions: 2020 and Beyond (Coming Soon)
Advisory: Implications of IoT Security in the Insurance Industry (Coming Soon)
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This publication derives from our Advisory Practice, Product No: TP01PN1523VN01
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