Dell announced plans to acquire SecureWorks signaling the hardware maker's entry into the managed-security services market.
Security needs to be embedded in everything we do ... We recognize that and our customers are more frequently recognizing that as well.
Terms of the deal were undisclosed.
:In a statement, Dell called the acquisition a "strategic investment" as the company expands its portfolio of enterprise software and services.
SecureWorks, based in Atlanta, Georgia has about 700 employees. Dell said its revenue for fiscal 2010 is expected to be about $120 million. The company provides a number of security services, including managed firewall, managed network intrusion prevention and detection and vulnerability scanning. It also has a security and risk consulting services business.
SecureWorks competes with AT&T, IBM, Symantec and Verizon Business, in the managed security services market.
In a conference call with the press, Peter Altabef, president of Dell Services called the acquisition a "significant expansion" of the computer maker's IT services business. In addition to IT consulting, Dell sells infrastructure services, distributed computing services, storage services and application management. The missing services piece has been security, he said.
"Security needs to be embedded in everything we do," Altabef said. "We recognize that and our customers are more frequently recognizing that as well."
Dell is likely using the deal to try to offer more security services to midsize businesses, said Joshua Corman, a research director in the Enterprise Security Practice at The 451 Group. Last February, Dell acquired Kace Networks, which sells a desktop management appliance for midsize businesses, indicating they might make a move in this market, Corman said. In July, Dell announced a close partnership with SecureWorks to provide security services to midsize businesses.
"If you are Dell and you sell lot of servers and laptops, you've got a huge install base and you're getting a lot of support calls," Corman said. "Those support calls may be because of a poor security configuration or patch management as opposed to a defect in their products so it's logical that they offer security services."
SecureWorks has been a leader in the managed security services market and is capable of servicing large enterprises, Corman said. SecureWorks fell relatively under the radar until it acquired LURHQ Corp. in 2006 and along with it acquired a lot of talent, he said. In 2009 it acquired VeriSign's managed security services business.
Dell's announcement indicates the growing revenue available from security services often sought out by companies seeking to address compliance mandates like the Payment Card Industry Data Security Standards, said Eric Ogren, founder and principal analyst of the Ogren Group. Other firms are looking to cut costs by outsourcing certain security services, he said.
"Compliance drives the need for security reporting down into businesses that traditionally haven't done much security," Ogren said. "I think of Dell as a volume hardware manufacturer with the processes to support that, so it will be interesting to see how it packages SecureWorks security services to enterprises."