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EMC adds some Network Intelligence to security line

RSA fully on board too

Internet Security Threat Report 2014

EMC today finished off one security acquisition and then made another one.

The storage maker has completed its buy of RSA for $2.1bn and has plunked down $175m in cash for Network Intelligence. We've lost track of how many software companies EMC has purchased over the past five years, but it's clearly not shy about buying its way into new markets. Network Intelligence's products should provide a nice complement to EMC's expanding security arsenal, according to Allan Krans, an analyst at Technology Business Research (TBR).

"While RSA provided a solid backbone to EMC’s security division, TBR believes the addition of Network Intelligence will greatly enhance the value proposition of EMC’s portfolio," Krans wrote in a research note. "While RSA has strong expertise in token-based authentication and encryption, EMC lacked the intelligent security monitoring functionality Network Intelligence brings to the table. Locking down data is an important capability, but this acquisition lets customers move one step further and take an active role in monitoring their information infrastructure."

The purchase price for Network Intelligence could swell to $250m if certain performance goals are met. TBR estimates that Network Intelligence pulled in about $25m last year.

EMC has demonstrated a penchant for acquiring nearby firms, and the Network Intelligence buy follows this pattern. The private firm with about 125 employees sits in Westwood, Massachusetts - not too far from EMC's Hopkinton base. The two companies also have an existing relationship with Network Intelligence's Security Information and Event Information products being certified on EMC's Centera boxes.

"TBR believes EMC’s purchase of Network Intelligence may be a competitive response to IBM’s recent purchase of Internet Security Systems, which provides many of the same security offerings as Network Intelligence," Krans wrote. "Although IBM maintains a much larger portfolio of security offerings, TBR believes the addition of Network Intelligence will give EMC the two broad security tool sets (lock-down functionality and monitoring functionality) to compete in the security market."

RSA's CEO Art Coviello will head up EMC's new security division, which will still hold the RSA name. EMC used a similar setup when it purchased VMware.

EMC expects the Network Intelligence buy to close by the end of the business day.®

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