IBM's Trusteer Deal Reveals Anti-Web Fraud Firms as Ripe for Buyout
In the second major acquisition of a technology that combats Web fraud, IBM announced on Aug. 15 that the company had agreed to buy Trusteer, a provider of anti-fraud services for online banking.
The acquisition, whose terms were not disclosed but reportedly approached $1 billion, gives IBM a business that brought in $50 million in revenue in 2012, Avivah Litan, vice president of research with analyst firm Gartner, stated in an analysis.
The purchase continues corporate acquisition interest in the Web-fraud market. In October 2012, storage technology firm EMC, which consolidates its security properties under its RSA subsidiary, bought SilverTail, a rival of Trusteer, for a reported $350 million.
While the market for anti-fraud technologies that defend financial transactions is limited, they could easily be used in other situations as well and that may be driving corporate interest, Litan told eWEEK.
"The big companies like EMC and IBM see opportunities with these innovative companies that are coming out of the Web fraud space, but their technology is much more applicable across a broader set of use cases," she said. "They are trying to defend against weakness in Web applications, but those weaknesses are everywhere."
Until IBM can re-target Trusteer's technology at the more general enterprise market, the company may have trouble justifying the purchase, Litan said. Trusteer seems to be facing stiff resistance in expanding its market share among its core financial services clientele and the company's products are having an increasingly difficult time defeating financial malware, Litan stated in her analysis.
"In my opinion, Trusteer sold out at its peak," she said.
Security and technology giants have bought up smaller firms at a rapid pace over the past few years. In July, Cisco announced an agreement to buy network-security firm Sourcefire in a $2.7 billion stock purchase. RSA, which was acquired by storage-maker EMC in 2006, bought two identity and access management firms in July: mobile-security firm Passban and authentication firm Aveksa. Intel purchased security firm McAfee in 2011 and Hewlett-Packard has picked up a number of security firms, including ArcSight and Fortify Software in 2010.
While the acquisitions help the larger companies stay ahead in the market and buy innovative technologies that they did not create, enterprises and their IT security teams will benefit as well.
Some companies have to track 60 to 80 security products from two dozen vendors, and consolidation will help reduce the number of technologies that IT security professionals need to deploy, said Marc van Zadelhoff, vice president of strategy and product management for IBM Security Systems.
"This will not be this way in five or 10 years," he said. "I think a lot of the tools of today will become the features of tomorrow."