HP's acquisition of security and compliance management company ArcSight has security channel partners hopeful about increased financial backing and extended reach but they say the deal wasn't a surprise and won't likely have a significant impact on their business for a while.
HP said Monday that it entered into a definitive agreement to buy ArcSight for $1.5 billion, or around $43.50 a share -- a figure 8.3 times the company's revenue of $181 million in its last fiscal year. Executives at both companies contend that the marriage was designed to build specific security technologies -- such as network access, access control, change and configuration management -- into their applications, while giving the company the ability to evaluate threats in deeper context.
"Rather than waiting, we want to be able to test those before they go into the preproduction environment," said Jonathan Martin, HP vice president and general manager of information management and commercial solutions. "With that rich set of information we're able to evaluate those new threats with better context and find threats and find vulnerabilities more quickly, even by making changes into the development cycle."
Martin declined to specify whether HP would fold ArcSight's product line into its own or keep the company as a standalone entity, but hinted that it had designs to integrate the security technologies directly into its applications.
"Remediating action is the key to this new approach to security," Martin said, as opposed to "building security into the chip," he added.
While some recent security purchases, including Intel's acquisition of McAfee, have left many partners scratching their heads, this time solution providers say that the HP-ArcSight deal was one of the least surprising to date. ArcSight had announced earlier this month that it was putting itself up for bid, and contenders came down to a handful of enterprise organizations,which reportedly included IBM, SAP and Oracle.
"I don't think anyone is surprised by the acquisition. There were only a handful of companies. HP seemed to be the likely one," said Dave Gilden, vice president of public sector for Kansas City, Mo.-based FishNet Security, adding that the acquisition was indicative of an ongoing and accelerating trend of consolidation in the security space. "It's something that we're constantly monitoring. Hopefully (the ArcSight acquisition) is not disruptive to our customers and existing partnerships."
"I think it's a good thing for ArcSight," said Dan Thormodsgaard, director of solutions architecture at Fishnet. "Where were they going to go? How do they expand their product portfolio? They were bound to get consumed."
Thormodsgaard said that he anticipated that HP would probably retain ArcSight as a standalone entity for at least a year, similar to their strategy with 3Com's TippingPoint, which they acquired last year. The immediate result would likely mean "business as usual" for a while, he said.
"They don’t seem to really touch (acquisitions) for about a year, much like we saw with TippingPoint," he said. "It will be interesting to see how it will play out with the recognition of (ArcSight's) VARs, how they embrace that."
Gilden said that it's still unclear how the acquisition will impact Fishnet going forward, but said he planned to closely watch how HP will transform or evolve ArcSight's services space.
"That's something we'll be keeping our eye on -- to see if they're going to integrate (ArcSight) into their existing channel model or keep them as a standalone program," he said, contending that he'd prefer if the company was kept as a standalone entity, while acknowledging that "that's unlikely."
Next: HP Executives, ArcSight Partners Weigh In On Deal