Spyware Spending Spree

Vendors of specialized products that combat spyware (or, as it is known in some quarters, scumware) are becoming hot acquisition targets as the IT industry attempts to deal with a new cyber menace.

Today, Microsoft Corp. (Nasdaq: MSFT) snapped up anti-spyware specialist Giant Company Software Inc. for an undisclosed fee in an attempt to boost its security story. This came just four days after 3Com Corp. (Nasdaq: COMS) stumped up $430 million for TippingPoint Technologies Inc. (see Microsoft Acquires Giant, 3Com Takes TippingPoint, and TippingPoint Blocks Spyware ). Earlier this year Computer Associates International Inc. (CA) (NYSE: CA) grabbed another spyware specialist, PestPatrol (see CA Acquires PestPatrol).

Spyware, which embeds itself into a host computer and drags down performance of both the computer and the network, has become a growing concern in data centers (see Spyware Blitz Spawns New Market).

Earlier this month analyst firm IDC predicted that revenues from anti-spyware software will rise from $12 million in 2003 to $305 million in 2008 (see IDC: Spyware Opens Market Opps).

Against this backdrop, Maxine Holt, senior research analyst at Butler Group is not at all surprised by the flurry of M&A activity. I am sure that we will see more of this type of thing,” she says. "Organizations are really looking to combat spyware, and they are looking to their security vendors to provide that."