Symantec Partners: Acquisitions Of PGP, GuardianEdge A "Good Move"

Symantec channel partners say that the company's acquisition of PGP and GuardianEdge is a move that comes with the required branding to give their own businesses a competitive edge in the encryption space.

The Cupertino-based company announced the duel purchase Thursday of encryption industry leader PGP for $300 million in cash along with Symantec's existing OEM partner GuardianEdge for around $70 million in cash. The deal is expected to close some time during the June quarter, however agreements are subjects to variable closing conditions, such as regulatory approvals.

Despite what might seem like surprisingly low pricetags for both companies, Symantec executives maintain that neither acquisition was considered a bailout or a giveaway.

"PGP is the most trusted in the encryption space. It is one of the most successful players in the encryption space. GuardianEdge was on a good trajectory, strong presence in federal sector and large in enterprise, particularly in the financial services sector," said Francis DeSouza, Symantec senior vice president of the enterprise security group. "We've already been working with those companies for a couple of years. We announced the integration of our DLP offering and PGP mail encryption offering, and we already have integration between GuardianEdge and Altiris."

DeSouza said that the company intended to incorporate both PGP's and GuardianEdge's product management, marketing, sales and engineering teams into Symantec's Enterprise Security division. "We are very familiar with their teams. We anticipate this to be one of the quickest integrations we've had," he said.

Meanwhile, Symantec channel partners hail the acquisition as a strategic move for the company as one that will enable them to begin expanding their offerings in the encryption space, from full disk encryption to data in motion.

"I think it's a good move for them, one of the better moves, in my opinion," said Darrel Bowman, CEO of Tacoma, Wash.-based MyNetworkCompany.com. "We have been exploring exactly that -- what we're going to do with our encryption and getting a partner like Symantec that we've relied on for a number of years who will include this as part of their overall package and support."

Next: Partners Say PGP Gives Symantec Brand Recognition In Encryption Space

Although Symantec already offers its own Symantec Endpoint Encryption -- a product which it currently OEM licenses from former partner GuardianEdge -- partners said that the product suffered from lack of brand awareness in the marketplace.

"It was really an OEM relationship with GuardianEdge. They really didn't have their own products. They leveraged others," said Dan Thormodsgaard, director of solution architecture for Kansas City, Mo.-headquartered Fishnet Security.

Gary Cannon, president of Advanced Internet Security based in Colorado Springs, Colo., said that PGP had strong market awareness in the encryption space, which now gave Symantec a competitive leg up with instant credibility and brand recognition.

"I think (the PGP acquisition) certainly provides some better brand name recognition on the encryption side," he said. "A lot of customers use a wide array of Symantec product. We haven't been able to get traction with Symantec Endpoint Encryption. It's a pretty good product. I just think that it's not well known like PGP. When people think of encryption they think PGP."

However, Cannon added that he was taking a "wait-and-see" attitude to see how the terms of the acquisitions played out. "I'm always a somewhat wary of the acquisitions of until I understand them better and what they're going to mean," he said.

FishNet's Thormodsgaard said that endpoint encryption had reached a saturation point, but that the biggest growth in the industry would likely be with products around data in motion, especially as compliance regulations such as PCI and a state encryption laws become increasingly more stringent.

"We're seeing an increased demand for encryption, but that increase is really for data in motion," he said. "We see in a future in DLP and encryption working together. There's nothing really today that addresses that," he said, adding that encryption by itself "doesn't necessarily solve the problems."

Thormodsgaard said that the PGP acquisition didn't come as a surprise. "I think we've been expecting this for a long time. Symantec didn't' really have full disk encryption." However, he said that he didn't see the GuardianEdge acquisition coming. "That was quite a shock here. There was rumor on the street that Symantec would acquire PGP, but I had not heard about GuardianEdge. We did not expect that (Symantec) would have both of them."