With SafeBoot Buy, McAfee Takes Another Shot At Encryption


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McAfee Tuesday announced plans to acquire SafeBoot, a privately held vendor of data encryption technology, for $350 million.

The cash purchase, expected to close in the fourth quarter, would be McAfee's largest since at least 1998, and reflects the growing demand in the market for mobile data encryption and data leak prevention solutions.

SafeBoot's flagship Data Protection Suite lets users encrypt entire hard drives, or individual files and folders on laptops, smart phones, USB drives and PDAs. The offering can also encrypt file servers to prevent accidental or malicious data leaks.

McAfee (then known as Network Associates) in 1997 acquired the staff and assets of PGP Inc., makers of the Pretty Good Privacy line of encryption products. But after PGP founder Phil Zimmerman left the company in 2001, Network Associates in 2002 sold off most of the PGP product line to an independent firm, which eventually became PGP Corporation.

One solution provider and McAfee partner, speaking on condition of anonymity, says McAfee faces an uphill climb in its quest to regain its status as a key player in the encryption space.

"McAfee has never mastered the encryption strategy, and I think people are losing confidence in their ability to sell and support encryption. It's going to take some time for people to trust McAfee again for encryption technology after the PGP situation," said the source.

Other McAfee partners are confident that SafeBoot's technology will fit well within Santa Clara, Calif.-based vendor's portfolio.

"Encryption was probably the single most glaring piece missing from McAfee's security portfolio, particularly in the data leak prevention space," said Jim Hindy, CEO of Entre BTG, a Norcross, Ga.-based solution provider.

The deal, which is reminiscent of Check Point's $586 million acquisition in January of mobile encryption vendor Pointsec, will allow McAfee to add encryption and data leak prevention to its ePolicy Orchestrator management tool, according to solution providers.

Pointsec's drawbacks have traditionally been price and a lack of centralized management, said Jim Brown, manager partner at nGuard, a Charlotte, N.C.-based solution provider. "SafeBoot is a solid product that has a great story to tell in both of these areas," he said.

SafeBoot, which has just 29 percent of its customer base in North America, has 4200 customers in 76 countries worldwide. But with just 145 employees worldwide, SafeBoot relies heavily on its strong channel partnerships, according to Vimal Solanki, senior director of marketing for McAfee.

Once the deal is finalized, SafeBoot's technologies and McAfee's existing data leak prevention offerings will be rolled up into a new Data Protection product business unit, headed by SafeBoot CEO Gerhard Watzinger, who will report to McAfee CEO Dave DeWalt.

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