Post the recent Sophos acquisition of Cyberoam its CEO and MD Hemal Patel gives securitycurrent more information on the terms and what the acquistion means.
sc: Sophos already acquired a UTM vendor. What did they see in Cyberoam that complemented or even replaces their current UTM offering?
Hemal Patel: “Sophos and Cyberoam complement each other in many ways and both are a compelling combination in three key respects:
“Right market: Both companies have a shared focus on the large and high growth network security market. Both companies are innovators who have substantially outpaced the market growth in UTM, one of the fastest growing IT security markets. Both companies are dedicated to making security simple and are focused on the same customer segment of small and midmarket enterprises and “pragmatic enterprises” of any size.
“Right technology: Cyberoam delivers a set of high performance complementary product and technology assets that will broaden the Sophos solutions portfolio and expand opportunities for partners and customers. The fact that both companies share a common core architecture was a major driver behind the acquisition of Cyberoam. Rapid integration of the separate solution strengths will be enabled by both sets of network security solutions being based on similar foundations, common attributes include:
- Hardened Linux operating systems (OS)
- Optimized Intel compatible server systems
- Modular security applications
- Use of Open Source technologies (e.g., Snort IPS)
“In addition to a shared common architecture in UTM and network security, the companies have a broad range of complementary technologies. Cyberoam customers and partners will benefit from Sophos strengths in threat protection, endpoint protection, secure Wi-Fi and innovations like Sophos RED (Remote Ethernet Device) to help protect large distributed networks. Cyberoam brings unique capabilities in user based policy with its Layer 8 Identity-based polices, application control, high performance packet filtering, and logging and reporting.
“Right place: Together the two companies can tap into multiple established centers of strong engineering talent, including in Europe, North America, and India. In addition, the combined company will have significant global reach and resources in UTM-oriented sales, marketing, customer support, and operations. Cyberoam brings a global customer base and channel network, but is particularly strong in India, Middle East and Africa.”
sc: The announcement says that the Carlyle Group sold their 80% stake in Cyberoam. Did Sophos acquire the other 20% too?
Hemal Patel: “Yes. Cyberoam is now a 100% subsidiary of Sophos.”
sc: What was the cost of the acquisition, in terms of dollars and stock?
Hemal Patel: “We are not disclosing the purchase price.”
Will this mean that Cyberoam will become a contender for the US market?
“By joining forces, both Sophos and Cyberoam will be able to add more resources to accelerate our success in network security, across every aspect of the business: more resources for product innovation, more support strength, and more sales and partner reach in markets where one is stronger than the other. As explained earlier, together, the combined company will have significant global reach and resources in UTM-oriented sales, marketing, customer support, and operations, which means, yes, Cyberoam will become a contender for the US market where Sophos has a significant presence.”
sc: What is the driving factor for the acquisition? How will this impact customers?
Hemal Patel: “Our goal in coming together is very simple: to take the significant success that each company is achieving on its own, and to expand and accelerate that success even further. According to IDC, the UTM market is $2.5B and growing at 15-20% per year.
“We are performing very well in the market, and outgrowing our competitors. But we have a stated ambition to become a much larger player in network security – not only in UTM, but in a number of exciting adjacent markets that are growing even faster, like next generation firewall (NGFW), advanced persistent threat (APT) protection, and wireless security.
“With the two companies coming together, we add more resources to accelerate our success in network security, across every aspect of the business: more resources for product innovation, more sales and partner reach, more support strength, and a higher profile as a disruptive leader in the industry.
“For Cyberoam customers, it will be business as usual – but better.
- More resources means more innovation and more sales opportunities for partners. The combined company will have more resources focused on the high-growth UTM market as well as exciting adjacent markets in network security such as next generation firewall, APT protection and Wi-Fi security. The company will have over 2,200 employees with over 750 in research and development, many of whom are dedicated to network security. That means we can take the two companies’ existing roadmaps and enhance them, and add new offerings to future roadmaps that allow us to protect our customers better.
- Customer Care. Both Cyberoam and Sophos share a strong reputation for high quality products and strong, responsive customer support, and the combined company expects to further invest in this area as a key differentiator.
- Security made simple. Both Cyberoam and Sophos are renowned for their products’ ease of use and manageability, and the combined company will deepen its commitment to delivering complete security without complexity.”