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Trend Micro acquires HP TippingPoint for $300 million

Trend Micro agreed to purchase HP TippingPoint for $300 million in an effort to bolster network security, but experts disagree on the strategy of either company involved.

Trend Micro Inc. has big plans for network security, with its purchase of HP TippingPoint. As Trend Micro acquires TippingPoint for $300 million, the company already has plans to create a Network Defense business unit, which will serve more than 3,500 enterprise customers. HP said it plans to invest more in other areas of its portfolio.

Steve Quane, former chief product officer for Trend Micro, based in Irving, Texas, and current executive vice president of the newly created Network Defense unit, told SearchSecurity that the acquisition of TippingPoint will allow Trend Micro to become the first security vendor to combine intrusion prevention with breach detection.

"We will also increase investment in TippingPoint, and ensure current TippingPoint customers are well served and retained," Quane said. "We plan to continue to expand on the combined effectiveness of next-generation intrusion prevention systems, along with our breach detection system, Deep Discovery, which has been sold by HP TippingPoint as Advanced Threat Appliance."

Neil MacDonald, vice president and distinguished analyst with research firm Gartner Inc., based in Stamford, Conn., agreed with this strategy.

"The acquisition of TippingPoint is a positive move for Trend Micro," MacDonald said, "if they focus on data center and cloud IPS protection, and not go after the NGFW [next-generation firewall] market."

Rick Holland, principal analyst for security and risk management at Forrester Research Inc., in Cambridge, Mass., wasn't as bullish on TippingPoint, but noted that Trend Micro was also gaining security talent in the deal, including the staff of TippingPoint's Zero-Day Initiative.

"This would have been a much more exciting acquisition 10 years ago. Trend Micro is trying to differentiate and get more features for network security, but they aren't going to be able to compete with the industry leader, Palo Alto [Networks]," Holland said. "It does position them to be better than FireEye, because TippingPoint is a more mature IPS than what FireEye offers."

Trend Micro said the deal was made with an eye towards the future.

"With this acquisition, we are again looking ahead, bolstering our team for the next front in cybersecurity, which we believe will zigzag across users, servers, networks and the cloud," Quane said. "This acquisition helps Trend Micro achieve our mission to make the world safe to exchange digital information. We are building for the future."

HP shifts investment

A deal to sell TippingPoint had been rumored to be on the way. And HP saw this deal as a way to build for the future, and made it very clear that security is at the heart of its strategy for the new Hewlett Packard Enterprise.

"The reason we announced the definitive agreement to divest TippingPoint is that while it has been an important component of our security offering, we have decided to partner in network security as opposed to own, so we can invest in other areas of our security portfolio," an HP spokesperson said. "The divestiture gives HP the opportunity to accelerate our investment in security intelligence, application security and data security."

MacDonald said that TippingPoint has always been something of a "misfit" in HP's security portfolio.

"HP was late to the NGFW market and organizationally, there was no synergy between HP Networking and HP Software, where TippingPoint was located," MacDonald said. "However, Arcsight and Fortify are market leaders in their categories, and the acquisition of Voltage is doing quite well."

Holland said it wasn't just TippingPoint that was a misfit, but HP's security strategy as a whole that might be missing a unifying vision.

"I'm skeptical of HP's ability to successfully accelerate their security business," Holland said. "They have had years to do it and divesting TippingPoint probably won't make that much of a difference. They need to demonstrate that they can provide a cohesive security portfolio, not just a collection of acquisitions."

HP said its preferred strategy is organic investment in key focus areas across its portfolio, as Hewlett Packard Enterprise CFO Tim Stonesifer outlined at an analyst meeting last month.

"We expect research and development to continue to grow as a percentage of revenue," Stonesifer said. "Of course, we will also consider inorganic investments through strategic partnerships or our Ventures program. We will also consider mergers and acquisitions in the right circumstances."

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