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January 3, 2020
According to PE Hub, Dell has hired Morgan Stanley to sell RSA for at least $3 billion. RSA has more than 30,000 customers globally, and its channel partners include VARs, distributors, systems integrators and consulting firms.
Dell isn’t commenting on the report.
Eric Parizo, senior analyst with Ovum, tells us he’s surprised it’s taken this long for Dell to make a concerted push to sell RSA.
Ovum’s Eric Parizo
“Dell arguably has too many cybersecurity-related assets considering security is not among its core competencies,” he said. “There is now quite a bit of solution overlap on cybersecurity within the Dell universe, with Dell’s own assets, SecureWorks, and VMware’s growing security division. For instance, including RSA, Dell now has at least three different endpoint security products. Over time, it has been increasingly difficult to see where RSA fits within its broad matrix of security capabilities.”
RSA’s biggest problem has long been its strategic identity crisis, Parizo said. It has a number of distinct product lines, but despite its best efforts over many years, it hasn’t been able to bring these solutions together into a “compelling” set of integrated offerings.
“Even before Dell’s acquisition of EMC, there were a lot of questions when EMC acquired RSA in 2006 about how EMC would give RSA the much-needed strategic focus that the company needed,” he said. “Today, the business unit is less focused than ever, and more than a decade after that deal, RSA is still valued at less than what EMC paid for it. Related to that, it is understood that a key motivating factor in such a sale would be to get the RSA debt (via EMC) off of the Dell balance sheet. With so many high-profile/high-value cybersecurity-related sales recently, there may be no better time than now to strike a deal.”
Because RSA has so many disparate lines of business, Parizo expects the company will be broken up in some way.
“If I were Dell, I would keep the security operations and threat detection technologies, and look to pair those with what VMware is assembling,” he said. “For instance, a combination of NetWitness and Carbon Black would immediately create one of the most compelling network-endpoint combinations on the market, and be a strong competitor in the emerging XDR market segment. Then I would look to sell the rest of RSA piecemeal; companies like Micro Focus and Broadcom are eager to acquire established software assets like those of RSA in order to complement or strengthen its existing lines of business in areas like identity and access management (IAM) and governance, risk management and compliance (GRC).”
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