by Scott Denne
In making its latest security purchase, BlackBerry joins a pageant of infosec acquirers chasing after ballooning budgets. With BlackBerry’s $1.4bn pickup of Cylance, there have now been 15 acquisitions of infosec vendors valued above $250m this year, according to 451 Research’s M&A KnowledgeBase. Only three of those were printed by buyers who make infosec their primary business.
To be sure, BlackBerry isn’t new to the security market. Since its mobile device business began its decline earlier this decade, it has focused on mobile device management software and expanded on its reputation for secure communications since the purchase of encryption specialist Secusmart in 2014. Still, this deal marks its most significant dive into cybersecurity. (In fact, it’s the company’s most significant acquisition in any category as it’s three times the size of its previous organizational high – the $425m pickup of Good Technology in 2015.)
Many of this year’s acquirers resemble BlackBerry in being on the edges of infosec and looking to go deeper. Splunk, for instance, printed its $350m reach for Phantom Cyber just as its security revenue was expanding to 50% of its topline. Others had little presence in cybersecurity: TransUnion and Reed Elsevier, both already in the risk business, got deeper into digital risk by nabbing antifraud firms. Also, AT&T moved into the market with the acquisition of AlienVault. And, of course, reflecting the broader trend in tech M&A, private equity (PE) firms are the largest category of infosec acquirer.
Whether from telecom or PE, expanding budgets are the draw for most buyers. Across all of our surveys, security budgets have risen steadily and dramatically. Among respondents to 451 Research’s VoCUL: Corporate IT Spending survey, at least 18% have indicated rising security budgets in each of the past five quarters. In that same time, no other single software segment garnered higher than 12%. And in our security-focused panel, the responses have been more dramatic. In 451 Research’s Voice of the Enterprise: Information Security report, 80% anticipate rising budgets in 2018, compared with just 6% forecasting a decline.