With enterprises demanding more tightly integrated security products than ever before and pressure increasing on vendors in the space to offer as many tools as possible to win deals, experts say that an increasing number of technology providers will turn to licensing agreements to help increase their marketability.
OEM (original equipment manufacturer) pacts have long been a staple of the technology world, as companies have inked partnerships with firms in other market segments to package and resell their products.
By tying products together in the factory and selling them to customers as a package, end-users are saved from trying to do that legwork for themselves, and gain a single point of contact for multiple tools, advocates of the agreements maintain.
As IT security has grown into a major headache for enterprises, demanding that they employ reams of technologies to ward off attacks and meet the demands of compliance regulations, businesses have demanded broader sets of integrated products to help them meet the challenge.
And although massive security vendors such as Symantec and McAfee have gone on acquisitions sprees in the name of building integrated packages of technologies to address the call for fewer individual products and vendors, market watchers contend that a growing number of smaller firms will look to OEM pacts to gain similar capabilities.
There is already a plethora of high-profile OEM arrangements in the security space, including partnerships such as IBM's Internet Security Systems division's deal to provide Arbor Networks' Peakflow X network monitoring appliances to customers. Even anti-virus market leader Symantec has carved out a relationship with Juniper Networks whereby the infrastructure specialist is providing customized security hardware to Symantec clients.
In the coming months, analysts believe, midsized and smaller security vendors will begin signing more deals to increase their footprints and remain relevant with enterprises.
"Size really matters these days in the security market, and with the mergers and acquisitions activity we've seen among larger players in the last six-to-nine months, it really points in the direction of OEM deals for smaller and midsized vendors," said Andrew Braunberg, analyst at Current Analysis, based in Sterling, Va. "These companies are looking to provide an integrated suite, and to do so quickly, and the OEM channel is one of the best options for them to do that."
Braunberg specifically believes that security vendors will look to add technologies including DLP (data leakage prevention) and NAC (network access control), which are currently in hot demand from enterprises.
"Participants in these deals also gain new exposure to their partners' installed base, which is an attractive new channel," Braunberg said. "There's also the issue of speed to market. Building technology yourself is almost out of the question from that angle, and to a degree so are acquisitions, which can move very slowly."
One of the best examples of security companies pursuing the OEM strategy to increase their coffers is Webroot Software, a long-time anti-spyware specialist that has signed licensing deals both to add to its own product lines, and to market its products via new avenues.
While some industry watchers have predicted that Webroot would be acquired or disappear as a result of its niche status, the company has undertaken an aggressive OEM strategy to widen its presence and make itself more attractive to customers.