What McAfee's acquisition of Stonesoft means for the companies and their customers

Analysis

What McAfee's acquisition of Stonesoft means for the companies and their customers

Warwick Ashford

Intel-owned McAfee has completed its acquisition of Finnish firewall company Stonesoft, following a $389m deal announced in May, but what does this mean for the companies and their customers?

McAfee acquires a modern firewall technology to bolster and round out its network security offerings, while Stonesoft gets the backing of a strong brand, including access to McAfee's global customers, technical and sales support, and distribution networks and channel.

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This is fairly important for Stonesoft because despite the strength of its technology, a lack of presence in North America may have stifled its growth, according to Javvad Malik, senior analyst, enterprise security practice, at 451 Research.

"With the McAfee brand behind it, we could see Stonesoft become a bigger player in the market," he told Computer Weekly.

A bigger share of a growing network security market

As far as McAfee is concerned, the acquisition should mean that it will be able to expand its share of the enterprise market, with enterprises currently spending around 25% of their annual budget on network security, according to Forrester.

The enterprise network security equipment market is forecast to grow at a 7% compound annual growth rate during the next five years to reach $11.4bn by 2017, according to Gartner. The analyst firm predicts particularly high growth in the next-generation firewall market – rising from $500m in 2012 to $4.6bn in 2016.

Network security has become even more important in light of the fact that a fast-growing mobile market and a declining PC market is likely to have a negative impact on McAfee’s core desktop security business.

While helping McAfee capitalise on market growth and demand, the move also fits into the security firm’s Security Connected strategy and vision.

“From a McAfee security standpoint, the purchase makes sense. McAfee has been diversifying outside of simple endpoint antivirus onto the network, and this purchase fits in nicely,” said Malik.

“However, it is slightly less clear how this fits in with Intel’s grand plan of things,” he said.

Ashish Patel, Stonesoft’s UK-based regional director, said the acquisition demonstrates that large companies such as McAfee and Intel understand that “there are groundbreaking technologies out there that need to be brought into the mix”.

Such acquisitions, he said, help encourage innovation by bringing new funding into an industry.

Customers will benefit from 'unparalleled security'

But what about the customers?

According to Tyler Shields, senior analyst at Forrester, how customers will be affected depends largely on how McAfee integrates the Stonesoft products into its current offerings.

“This will determine the long-term effectiveness of the acquisition,” he told Computer Weekly.

Stonesoft's advanced evasion technique (AET) research could be used to bolster the entire McAfee product line, said Shields, while its next-generation firewall (NGFW) offering will likely be seen as a market upgrade to the McAfee Sidewinder product.

The AET expertise will provide added protection for McAfee customers against new and emerging threats that combine several different known evasion methods to create a new technique that is delivered over several layers of the network simultaneously.

“McAfee is going for a unified next-generation security architecture play with this acquisition, setting its sights on the big players such as Cisco and Juniper,” he said.

In turn, McAfee’s expertise and cloud-based Global Threat Intelligence (GTI) service will give combined customers “unparalleled security”, said Stonesoft’s Patel.

Patel said the GTI capability is one of McAfee’s core strengths and will be one of the technologies that will be added to Stonesoft’s portfolio to take its products ahead by “leaps and bounds”.

Combined customers will also benefit from having one supplier that can provide visibility on the endpoint and across the network layer.

“This can help in having one view and one product to manage malicious or suspicious activity across both channels,” he said.

However, Malik pointed out that unlike the US, where if you acquire over 50% of a company you own it, in Finland it is nearer 90%.

“It will probably take a few months before McAfee will be able to properly start stitching together some of the seams,” he said.


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