Dell To Buy Managed Security Provider SecureWorks

Dell has agreed to buy SecureWorks in an all-cash deal that will give the computer maker its first branded managed security service as the company builds out its software-as-a-service offerings to simplify customers' IT infrastructures.

Dell announced Monday that it would acquire its security partner, which sells a variety of remote services, including network monitoring, security management, Web app scans, security assessment, and compliance assistance. Dell announced a partnership last summer with SecureWorks and decided it would be better off owning the security firm. "It was just an outstanding opportunity that, quite frankly, was too good to pass up," Peter Altabef, president of Dell Services, told reporters in a conference call. Financial details were not disclosed.

The acquisition would give Dell its first company-branded managed security service, expanding its appliance-based security offerings to include SaaS. Dell offers network security through the J-SRX Services Gateways unified threat system, developed with Juniper Networks. Dell's endpoint security offering is built on last year's acquisition of Kace, which offered appliances for vulnerability assessment and remediation and patch management.

While security hardware is an important option for customers, sales are expected to grow much faster in remote services, which offload the work of network security to a service provider. The sales potential is reflected in SecureWorks' revenue growth. The company's $1 million in revenue nine years ago has grown to $120 million today, according to Michael R. Cote, chairman and chief executive of SecureWorks, who joined Altabef in the teleconference.

Dell intends to swallow SecureWorks whole, hiring all its employees and keeping all its offices open. "This is a growth story for us and this is the focus of the acquisition," Altabef said.

Dell plans to offer SecureWorks services as an option in its Kace appliances, as well as the company's servers and storage hardware. The integration of remote services is Dell's strategy for boosting hardware sales. Dell last year bought Boomi, a startup that specialized in tying software services with in-house systems. In December, Dell bought InSite One, a cloud-based medical archiving company that gives healthcare organizations the option of offloading the task of long-term data storage.

Roughly half of SecureWorks' business is with financial institutions. Dell believes the company's credibility with such a security-conscious industry will help push managed services to industries where Dell is particularly strong, including government, manufacturing, and healthcare.

SecureWorks claims to process more than 13 billion potential security threats for 2,900 clients each day and says the number is growing. Dell, which has been building out its software, services, and hardware portfolio through acquisition for several years, says any security-related purchases in the near future will likely add to SecureWorks' capabilities. "While never say never about future acquisitions, right now, we're focused on SecureWorks and SecureWorks is our security platform going forward," Altabef says.