Dell Secures Its Cloud Strategy With SecureWorks Acquisition

Dell confirmed it will acquire SecureWorks, an information-security services company. The acquisition is another step on the company’s cloud road map as it looks to compete with Hewlett-Packard and IBM, analysts say.

Given that both Hewlett-Packard and IBM are touting security for the cloud, it only makes sense that Dell would want to do the same, opined Wendy Nather, an analyst with the 451 Group.

“I think Dell sees this as their way of greasing the skids for cloud adoption; a lot of enterprises are still skittish and they won’t feel better until they trust the security management… From that perspective, SecureWorks was a solid buy with some global experience and proprietary technology that can be adapted,” she said.

Key Investments In Services

The deal is expected to close sometime in February, or “in approximately 40 days,” Peter Altabef, president of Dell Services, said during a conference call. Although financial terms were not disclosed, Altabef said it was a cash transaction.

The acquisition is a “significant expansion” of Dell’s information-security capabilities, said Altabef. With its proprietary threat-management platform, SecureWorks helps clients protect assets, reduce risk, improve regulatory compliance and lower IT security-management costs, he said. The company specialises in various security-as-a-service offerings, including managed security, threat intelligence, risk assessment and security consulting, Michael Cote, president and CEO of SecureWorks, said during the call. The company claims almost 3,000 customers in 70 countries.

Dell has been making “key investments” in services, cloud and storage to meet customer needs, Altabef said. With SecureWorks in tow, Dell immediately becomes a “major player” as a managed-security services provider with a “full breadth” of security services, he said.

The company considered whether to “build or buy,” said Altabef. The rapidly increasing volume, sophistication, and speed of malware attacks convinced the company that it would have “taken too long to build organically” what was already available in the market, he said. The “deep” security experience the SecureWorks Counter Threat Unit research team had gained made the acquisition an “outstanding opportunity”, he said.

Through its management platform, the Counter Threat Unit team monitors, correlates and analyses 13 billion “security events” or potential security threats every day, said Cote. The team also sees more than 30,000 pieces of malware every day.

Security threats change at a “dramatic pace,” Cote said, and SecureWorks has in its database more than 10 years of attack data that it can refer to when it is trying to determine if a specific event is malicious.

Dell has been investing heavily in software-as-a-service and various cloud technologies in recent months, said Altabef. SecureWorks will complement those existing Software as a Service (SaaS) products, because up until now, the enterprise IT company did not have a Dell-branded managed-security service, Altabef said.

Dell’s focus is on “particular areas where the market is undervalued,” and bringing those products in-house to grow them to their potential, said Altabef, naming Boomi, the SaaS application integrator acquired in November, and InsiteOne, with its cloud-based medical-archiving product acquired less than two weeks ago.

“We are marching toward the future of services at a rapid pace,” he said.

SecureWorks has the opportunity to expand its services over Dell’s extensive distribution network, but also within Dell, said Cote. He said there were possibilities such as extending Dell’s Business Process Outsourcing services or cloud offerings to include a security component.

SecureWorks has been a “Dell shop for a while,” and the two companies have had a strategic partnership since June 2010, said Altabef.

This is a “growth-focused” acquisition, and Cote and the rest of the leadership team at SecureWorks have committed to Dell, said Altabef. SecureWorks has approximately 700 employees. “The cultural fit has been great” between the two companies, according to Cote.

Scott Crawford, research director at Enterprise Management Associates, commented, “Obviously, SecureWorks will not go toe-to-toe across the board with IBM Global Technology Services or the former EDS under HP but, with a recognised name in managed security services, Dell hopes to use SecureWorks as an edge, particularly where security is a primary concern – and definitely among SMBs, where a Dell-SecureWorks relationship has already been in play for some months now.”