Cloud security acquisitions will continue

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The cyber security sector is experiencing significant acquisition activity. During 2019, data and analytics company GlobalData counted a minimum of five acquisitions per leading vendor.

Rajesh Muru, Principal Analyst at GlobalData, says: “There are a number of factors that are driving mergers and acquisition (M&A) activity in cyber security. First, the advancement of enterprise IT in leveraging cloud delivery, and second the emergence of Internet of Things (IoT). Although public cloud providers include security to fortify their cloud infrastructure, the end user enterprise is ultimately responsible.”

Some of the companies that have been highly active in acquisitions include Palo Alto Networks, who made a number of acquisitions in 2019. These include acquiring Twistlock and PureSec, to extend its Prisma™ cloud security strategy, and the acquisition of Demisto, a leading cyber security company. Other examples include Check Point Software acquiring Cymplify to build its IoT security offering. Lastly, Accenture acquired Symantec’s cyber security services business from Broadcom, to build out its managed security threat intelligence services business by combining its expertise in advanced analytics, automation and machine learning.

Muru continues: “A key observation from all of these acquisitions is that many of these buyers are leading global companies with deep pockets. In a market where skill sets are in demand and product development life cycles are long, it makes business sense to bring in these capabilities through acquiring niche, but highly credible technology-savvy vendors.”

Within cloud security, in the next two years GlobalData expects acquisition opportunities in artificial intelligence (AI) base detection, internet of things (IoT) threat detection, workload protection platforms, cloud access security brokers (CASBs), and cloud security posture management. Additionally, we see vendors with credible solutions in threat management, identity access management, and improvements to platforms that translate security data for multi-cloud delivery gaining traction in the market which will make them interesting targets for investors

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