Dell's Acquisition of SonicWALL Foreshadows the Security Industry's Fate

“Dude, you’re getting a SonicWALL!”

On Tuesday, March 13, 2012, Dell announced its plan to acquire a leading vendor in the Unified Threat Management (UTM) market, SonicWALL. This will allow Dell to rapidly advance its security portfolio with the addition of next generation firewall, intrusion prevention (IPS) capabilities, SSL VPN, gateway anti-virus, anti-spyware, and content filtering. Dell’s previous foray into the network security industry was its acquisition of managed security services provider (MSSP) SecureWorks and vulnerability/patch management vendor KACE.

The acquisition provides a number of growth opportunities for SonicWALL. First and foremost, this enables SonicWALL to leverage Dell’s vast and mature channel partner program. This also provides SonicWALL with stronger economic stability and name brand recognition from Dell. Additionally, stronger financial backing will facilitate new product development. These factors will help SonicWALL to increase its penetration in the enterprise market, which has been a central focus for many UTM vendors’ growth strategies. As a result, Dell SonicWALL can potentially shake up the UTM market as we know it.

Further still, this announcement is additional evidence of the convergence of IT and security. The goal to achieve “built-in” security has been demonstrated by the acquisition activities of Cisco, Juniper, IBM, and HP, and was most evident with Intel’s acquisition of McAfee.

Fortinet, who has been the market leader in UTM sales for multiple years, has excelled due to its product quality and ongoing product development. Check Point has a highly competitive strategy for the UTM market that focuses on modular solutions. This makes every firewall sale a potential future UTM sale. Both companies have demonstrated solid financial growth in recent years. However, Check Point and Fortinet are also some of the last large dedicated network infrastructure security companies.

So the big question is: how long will stand-alone security vendors find success with “security-only” strategies? At what point will enterprise organizations determine that they should be purchasing security solutions from their IT provider? Can security ever truly be “built-in” considering the constantly evolving nature of network-based threats?

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Industry Analyst Chris Rodriguez can be found knee deep in spreadsheets or e-mailed here.

For additional analysis of this market, check out Frost & Sullivan’s annual global market study entitled Analysis of the Unified Threat Management (UTM) Market and the Impact of Convergence or learn more about Network Security.