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Onapsis To Buy Cyber Security Firm Virtual Forge To Boost SAP Defense

The combined company will have 300 employees and some 250 enterprise customers, making it more than 10 times the size of its next largest competitor in the ERP cyber security space.

Onapsis has agreed to purchase ERP cyber security competitor Virtual Forge to strengthen its defense capabilities around SAP customizations and extensions.

The Boston-based company said Heidelberg, Germany-based Virtual Forge will complement the more traditional cyber security capabilities that Onapsis has around SAP, which include automation, vulnerability management, incident response and change management.

"Customers needed multiple vendors to be able to secure their SAP platforms," Onapsis co-founder and CEO Mariano Nunez told CRN. "Now, it's almost like a one-stop SAP cyber security shop."

[Related: CRN Exclusive: ERP Security Startup Onapsis Plans To Double Down On The Channel With $31 Million Round]

In order to do custom coding on SAP, Nunez said employees need to understand highly proprietary systems with complex programming structures and languages. Although this is very difficult for most companies to do, Nunez said Virtual Forge has a mature offering that's been developed over the past decade.

Virtual Forge was looking for strategic partners from an investment perspective when Onapsis approached it about a possible acquisition, Nunez said. Although Nunez had a good, respectful relationship with the executive team and technical experts at Virtual Forge, he said the two companies hadn't done any joint selling or integration work in the past.

The combined company will have 300 employees and more than 250 enterprise customers, Nunez said, making it more than 10 times the size of its next largest competitor in the ERP cyber security space. Terms of the deal, which is expected to close in the first half of this year, weren't disclosed.

"With the acquisition, we have consolidated ourselves as the most powerful ERP cyber security player," Nunez told CRN.

All roughly 100 of Virtual Forge's employees are slated to join Onapsis, with the company's current CEO continuing to focus on the go-to-market strategy in Europe once the deal is closed and the current CTO dedicating his time to innovation around the SAP security offering as well as geographic growth in the Europe, Middle East and Africa (EMEA) and Asia-Pacific regions.

The two companies are geographically complementary, with Onapsis focused mostly on North America and Virtual Forge—whose headquarters are located just 15 minutes from SAP's main offices—dedicated primarily to EMEA as well as Asia.

Onapsis and Virtual Forge will be combined functionally as well as geographically, with the integration work focused on fusing the product offerings onto a single platform. The first part of the integration process will focus on having a strong API set, Nunez said, with additional work to focus on unifying the dashboards and reporting mechanisms.

Solution providers, though, should be able to realize a benefit from the acquisition the first day after it closes, Nunez said. Onapsis has been working diligently to ensure a smooth transition, with sales operations teams working behind the scenes to ensure that the sales plans deliver the right message, according to Chief Revenue Officer Chris Smith.

The combined company's ability to support SAP from both a code and application perspective will make Onapsis a more attractive vendor partner to MSSPs since partners and customers alike would like to see consolidation in the market, Smith told CRN.

Onapsis has done roughly 50 percent of its business through the channel, but Smith would like to grow that figure to at least 65 percent and perhaps as high as 75 percent to 80 percent predominantly through deepening its relationship with systems integrators such as IBM, Deloitte and Accenture. The deal should also ignite opportunities for partners internationally in both EMEA and Asia-Pacific, he said.

"There is a huge opportunity for partners to drive a security offering," Nunez said.  

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