EMC splashes the cash to bring RSA on board

Storage giant EMC has splashed out US$2.1 billion cash to snap up identity management specialist RSA Security. The deal once again highlights the growing overlap between storage and security solutions.

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By  Stuart Wilson Published  July 2, 2006

Storage giant EMC has splashed out a whopping US$2.1 billion cash to snap up identity management specialist RSA Security. The deal once again highlights the growing overlap between storage and security solutions. At present, RSA Security uses Fusion as its sole distribution partner in the Middle East. Commenting on the recently announced agreement for EMC to acquire RSA, Lee Reynolds, marketing director at Fusion, said: “It is still very early days in terms of this acquisition and these deals can typically take several months to complete so it is business as normal until then.” “We have good links with some of the EMC people in the region and we will be keen to keep the RSA relationship going. There is a strong pipeline of projects for RSA Security in the region and we have seen business doubling year-on-year with RSA,” Reynolds added. RSA has numerous reseller partners signed up in the Middle East. In the UAE, CNS, Emircom, Intertec Systems, Paramount Computer Systems and Seven Seas are all authorised resellers for RSA. Emitac has also recently been approved to become an official registered RSA access partner. In Saudi Arabia, both Ejada and National Technology Company are authorised resellers for RSA. Joe Tucci, EMC’s chairman, president and CEO, commenting on the decision to purchase RSA, said: “Information security is a top priority among executives around the world, and it has become an inseparable attribute of information management. Businesses can’t secure what they don’t manage, and when it comes to securing information, that means simply two things — managing the data and managing the access to the data.” “EMC is the leading provider of information management solutions. Bringing RSA into the fold provides EMC with industry-leading identity and access management technologies and best-in-class encryption and key management software to help EMC deliver information lifecycle management securely,” Tucci added. “This acquisition signals a fundamental change in the landscape of the security market. EMC is 100% committed to applying the resources required to continue to expand RSA’s leading market share while also tightly integrating their technology with EMC’s products to bring customers the best information-centric security product portfolio,” he concluded. The deal is expected to close late in the third quarter or early fourth quarter of 2006, subject to customary closing conditions and regulatory approvals. EMC has certainly attached a premium valuation to RSA Security, paying US$28 per share — a 22% premium on RSA’s closing price on the day the deal was announced. RSA sales were flat in 2005 at US$310m with profits climbing 20% year-on-year to US$42m. Tucci has stated that he expects RSA to be a US$500m business by 2007. Commenting on the deal, Art Coviello, CEO and president at RSA, said: “Information security threats are evolving from attacks on the network and the perimeter to attacks on the data itself. These attacks are designed to obtain information, intellectual property and other information that can be exploited for criminal gain. For this reason, security must be an integral part of the information infrastructure, transparently allowing authorised users to easily get access to information.” “The combination of RSA’s leading security technology coupled with EMC’s best-in-class information infrastructure and financial resources will accelerate the integration of security into the information infrastructure,” he added.

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