A number of people have wondered why we have been silent on EMC’s intent to purchase Archer Technologies. Well, we’ve been waiting to see what kind of vector this story developed over the coming days. Having followed Jon Darbyshire and Archer since the beginning, we wanted to take the time to look past the press releases and dig a little deeper into how this acquisition might play out for all parties involved, and specifically, what Bain Capital Venture‘s involvement may spell for the future.
Analysis and Commentary, Mergers and Acquisitions
Orchestria Gets Picked Off by CA
On Monday, Computer Associates announced their intent to acquire DLP player Orchestria. With Provilla getting snagged by Trend Micro, Tablus by RSA, Vontu by Symantec and Reconnex by McAfee, it feels like the last year or so has been DLP speed dating. A few weeks ago, after the Microsoft/RSA announcement (our take on it here) , our Guest Researcher and Resident-Expert-For-All-Things-DLP-Related, Jared Thorkelson indicated that his phone had been ringing with inquiries about who CA was looking to pick up.
Had we not been distracted by the holidays, we should’ve called this one. Quite frankly, with the composition of the Orchestria management team, we should have called this one a long time ago. As we noted in our breakdown of Palo Alto’s latest round of funding (article here), it’s all about who you know and where your roots are laid down. In this case, all of the following Orchestria management team members were CA alumni:
- Paul Dean, SVP of Product Management: Formerly an AVP of storage at CA overseeing the ArcServe and SurviveIT product lines.
- Peter Malcolm, Founder and CTO: He joined CA from the acquisition of Cheyenne Software where he was the VP of Engineering and went on to become the SVP of Business Management at CA. He was also over the SurviveIT product line and then went on to tackle the entire storage line. After that, he moved over to Benchmark Capital as their European “Entrepreneur in Residence”. It’s no surprise then that Benchmark is an investor in Orchestria.
- Andrew Stickler, SVP of Engineering: Stickler and Malcolm date back to IQ International, a company founded and led by Malcolm that was acquired by Cheyenne in 1996. p[ost-acquisition, Stickler worked on the SurviveIT and ARCserve products.
We continue to encourage our community, specifically those of you buying technologies but also those VARs with a portfolio to manage, to research the companies you do business with. While you may be very happy with the relationship thusfar, as more and more of the big players look toward “off balance sheet R&D”, we will see more smaller players getting picked off (if they survive long enough). By understanding where the relationships are, you can gain some insight into who possible suitors are and where the technology might be headed.
As always, we are here to help. Don’t hesitate to submit a research inquiry before you make a purchasing decision. We can also help you narrow the field to those companies that are best aligned with your currently portfolio of tools.
Analysis and Commentary, Mergers and Acquisitions
Marshal and 8e6 Technologies Tie the Knot
Last week, U.K.-based Marshal and U.S.-based 8e6 Technologies announced that they are merging to create a company that will offer a suite of products to protect corporate and web-based e-mail, instant messaging, and web surfing. While the deal was nearly a year in the making, the new combined company – Marshal8e6 – has wasted no time in driving their 250 person global team since the papers were signed on November 12th. During this flurry of activity, we were fortunate enough to get some time with Marshal8e6’s Senior VP of Corporate Development, Paul Myer to pepper him with questions about the new company and where they are headed.
Myer works out of the company’s headquarters in Orange, CA, the same building where he was President and COO of 8e6 Technologies. He is joined by longtime 8e6 colleague George Shih, former 8e6 CEO, who is now the interim CEO of the combined entity (pending a new CEO search) and President of the Americas region. Meanwhile, across the pond, Bruce Green, former CFO of Marshal, will be President, International operating out of the international headquarters in Basingstoke, UK while Ed McNair, former Marshal CEO, and now Chief Strategy Officer, busily packs his bags for the move to Orange, CA in January.
Once a deal was hammered out, both firms moved quickly, this was easy according to Myer since both firms were privately held. The exact financial details are not public, but from our discussion, we know that Updata Partners invested $10 million into the deal. James Socas joins the board as a result, bringing his experience in M&A work from Symantec with him. Socas feels that investing in a down economy is like bargain shopping and the cash infusion will empower the new firm to go out and look for technology buys that fit the growth model. Look for him, McNair and Myer to start shopping for good deals in this down market with that $10 million warchest. We speculate that they may move into enhancing their perimeter protection play by picking up some technology around intrusion prevention or more traditional firewall. This would give Marshal8e6 a significant boost in terms of competitive advantage against the larger players.
The combined trailing revenues are about $50 million per year, and the team has plans to grow that to $100 million by 2010. This aggressive growth plan includes strong upselling/cross-selling to respective markets (Marshal strong in EMEA, 8e6 in Americas) and technologies. With 75% of Marshals’ past 12 months of revenue from the mail security products, this is fertile ground for 8e6’s mature content filtering technology. Similarly, 8e6’s market strength around web filtering makes a compelling case for layering on messaging protection. The cross-sell opportunities gain momentum from the rapid work toward integrating the product lines that has already started.
According to Myer, the #1 development priority is to integrate Marshal’s existing TRACE threat lab and 8e6’s web site databases into a single threat store that feeds both sides of the business. Within the next week or two, they expect the TRACE database to be feeding the 8e6 platform live data. By Q1 they expect tighter integration of the data and feeding the Marshal platforms with 8e6’s store of malicious sites. This is a boon for blended threat attack detection and speaks volumes of the positive working relationships the two companies have formed over the past year. The sheer speed of the integration efforts, and the rapid value addition, if sustainable, should give them a leg up on competing with more entrenched players in the market. The larger companies (Symantec, McAfee, CA, etc.) are still suffering indigestion from their rounds of acquisitions and in most cases have had a difficult time integrating technologies.
The future product roadmap includes merging the reporting products into a single appliance that can manage and report across both messaging and web defense appliances. The early expectation is that the first phase of this will be completed in Q2 2009. Future integration of the defensive appliances may include a single hardware footprint for unified threat protection. This also is a clear winner when it comes to minimizing the total installation footprint, as well as giving strong messaging to the sales and channel teams. We expect some serious cross-training of the new combined channel to enable rapid cross-product adoption in each market.
Speaking of the channel, it will remain largely untouched for now, as will technical support, with both companies continuing to operate much as they always have. This is a huge relief for the customers of the combined company since there will be little to no disruption to their support mechanisms, something else the big boys have struggled with in nearly every way with their acquisitions.
We look forward to seeing how Marshal8e6 fairs in the coming months, and whether or not they can continue their blistering pace on the integration front. If so, then we think they will have a compelling story to start the new year with, and one that should make the competition take notice.
Analysis and Commentary, Mergers and Acquisitions
Details on BlueLane Acquisition
While Hoff called this one on October 10th, by linking out to the Virtualization.com’s coverage , we still get some ‘scoop points’ for our coverage of the deal in September. After a little further digging, we have confirmed that Blue Lane was well beyond the speculated $18million mark on sugar daddy money, not the $13.4million Virtualization.com cites as their figure. Specifically, they received the following rounds:
- November 1st, 2003: $5million from Benchmark Capital and Matrix Partners
- June 17th, 2005: $13.8million led by Duff Ackerman & Goodrich with Benchmark Captial and Matrix joining the mix
- December 18th, 2006: $8.3million from all the above mentioned plus Presidio STX
This brings their total to a whopping (considering the exit) $27.1million. If indeed, they got picked up for $15million, then VMware got a sweet deal.
© 2010 Brightfly, Inc.
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