Trend Micro to acquire HP TippingPoint for new network security division

Trend Micro to acquire HP TippingPoint for new network security division
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With HP TippingPoint acquisition, Trend Micro can expand into the data center

Trend Micro’s planned acquisition of HP TippingPoint will let the company expand its business beyond its endpoint security roots into network security. The move gives Trend Micro a nice entry point into the data center.

Trend Micro plans to combine its existing technologies with HP TippingPoint’s next-generation intrusion prevention systems and related network security solutions to create a new Network Defense business unit serving more than 3,500 enterprise customers, the company said Wednesday morning. The agreement encompasses security technology, intellectual property, industry expertise, and a “large, loyal enterprise customer base,” Trend Micro said.

“Organizations need a layered threat defense working seamlessly across the enterprise to address threats before, during, and after an attack,” said Eva Chen, CEO of Trend Micro.

The fact that HP is divesting TippingPoint doesn’t come as a surprise -- there were rumors HP was looking for buyers before the upcoming restructuring in November. The final sale price is also in line with a Reuters report that private equity firms had offered between $200 million to $300 million for the business. After HP announced the restructuring plan to split the company into two separate entities back in September, industry observers had wondered what HP planned to do with its various security lines. TippingPoint going to a security company, especially one with which it already has an existing partnership, is one of the better outcomes.

The new Hewlett Packard Enterprise will focus on protecting the digital enterprise and investing in offerings that help customers protect users, applications and data, HP said in a blog post. As part of the new strategy, HP will keep TippingPoint as a strategic partner around resale, managed services, and OEM activities, as well as security intelligence, app security, and data security.

“TippingPoint has been an important component of our security offering, but we have decided to partner in network security as opposed to own so we can invest in other areas of our security portfolio,” HP said.

The deal is valued approximately at $300 million, which is significantly less than the $450 million 3Com paid back in 2005. TippingPoint became part of HP as part of the giant’s $2.7 billion purchase of 3Com in 2010. The transaction is expected to close before the end of 2015, which is the first quarter of fiscal 2016.

“For a blue light special price of $300 million, Trend Micro gains technology, presence in the enterprise, and a road map to integrated security services,” said Eric Ogren, chief analyst at 451 Research.

While there is a lot of interest around cloud services and platforms, most CSOs address their security concerns by starting with private clouds fueled by virtual data centers. TippingPoint’s management console “may be one of the hidden jewels” of the acquisition and give Trend Micro traction in virtualized data centers, Ogren said.

“Being able to protect those data centers and get visibility to the traffic inside is a nice step,” Ogren said.

There was some skepticism about Trend Micro’s focus on intrusion prevention systems to fuel its expansion into network security. IPS is increasingly viewed as a legacy platform, said Rick Holland, principal analyst at Forrester Research, noting that most Forrester clients are interested in next-generation firewalls. Getting HP TippingPoint won’t help Trend Micro compete against Palo Alto Networks.

“This would’ve been an exciting acquisition 10 years ago,” Holland said.

That’s not to say there aren’t clear benefits for Trend Micro. From a market standpoint, the company will gain new North American customers, which has been a growth focus in recent months.

On the product side, Trend Micro gains a network security offering that can work with its existing portfolio to provide enterprises with an end-to-end threat detection platform spanning endpoints, network, data center, and the cloud. The new next-generation network defense solution would combine network breach detection systems with intrusion prevention and response capabilities. Trend Micro’s Deep Discovery technology would be a natural point of integration.

The agreement includes the threat insight and expertise of TippingPoint’s Digital Vaccine Labs, as well as the Zero-Day Initiative, said Doug Cahill, a senior analyst with Enterprise Strategy Group Research. DVLABS provides real-time threat intelligence with innovative security filters to analyze vulnerabilities and exploits. ZDI works with an extensive community of researchers to responsibly disclose zero-day vulnerabilities. This acquisition lets Trend Micro add threat- and zero-day research teams to its existing research capabilities.

“I think this works well,” Cahill said.

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