The year of 2018 was next a wild one for sure. With the current political crisis, and the violent swings we have seen in the stock market since October. First, inflationary fears were the catalyst, then uncertainty about the trade wars, and now fears are arising about what the Feds are going to do next about interest rate hikes.
But despite all of this, there is one industry that has remained strong, and is predicted to do so even more in 2019. This is the Cybersecurity industry, and the fuel for all of this is the Cyberattacker.
Thus, as we close this year out in just a matter of about two days or so, let’s recap what has happened to the Cybersecurity economy, as it was mostly driven by mergers and acquisition:
*IBM will acquire Red Hat for about $34 Billion:
For those of you that don’t about this, Red Hat is probably one of the largest open source platform companies in the world, with their flagship product known as “Red Hat Linux”. This Operating System is just as or even more popular than the Windows 10 OS. This will be an all cash deal, but it still needs to get approval from the Red Hat shareholders and the Feds. This deal should close in Q3 of 2019.
*Private Equity firm Thoma Bravo acquires Imperva for over $2 Billion:
Because of the nature of this takeover, Imperva, once a public Cybersecurity firm, will now go private. Initially, there will not be too many changes; the same management team will be there, and Imperva will be able to stay at its existing corporate headquarters. This is deal is set to close by Q1 of 2019.
*Palo Alto Networks to acquire RedLock for $173 Million:
The former, which makes the popular business planning software called “LivePlan” is set to acquire the latter, which is a well-known Cybersecurity firm. All of the assets and the management team of RedLock will be absorbed by Palo Alto, in an effort to create a suite of products that will include Cloud Security Analytics, Advanced Threat Detection, and Endpoint Security. It is not known when the deal will close, but it is expected to happen sometime around 2019.
*Cisco buys out Duo Security for over $2.3 Billion:
This deal actually closed out on October 1st of this year. It was an all cash deal, and the primary objective of it was for Cisco to increase its base for offering more Cloud Security products for its existing customer base.
*AT&T to acquire Alien Vault:
This deal was initiated in July, and closed out on in August. No financial details on this particular buyout were given, but the basic objective of it was for AT&T to have the ability to deliver secure telecommunications-based products to the small and medium sized businesses (SMBs).
*A double buyout: Bomgar acquires Avecto and Lieberman Software:
This double acquisition made by Bomgar had two purposes: Offer an identity and authentication product line (made available from Lieberman Software); as well as to offer a product line that can help its customers come into compliance with the upcoming Cybersecurity Legislations pending for 2019. No financial details on the transactions were given.
*F-Secure acquires MWR InfoSecurity for $105 Million:
This deal closed out in June of this year, and shares were bought from MWR at $105 Million. This deal positions F-Secure as one of the largest Cybersecurity firms in terms of offering detection and response solutions.
*Barracuda buys out Phishline:
This takeover was one of the first Cybersecurity deals to transpire in the early part of 2018. The goal for this was so that Barracuda could offer products that make use of Artificial Intelligence to its customers, and to also improve the level of end user awareness when it comes to detecting Phishing based E-Mails.
My thoughts on this?
Well, these are some of the major takeovers that happened this year in the Cybersecurity industry. Have you noticed one common theme here? It is the big boys that are gobbling up the smaller fish. There is a good business to this. For example, why waste the R & D efforts and money to build a better mousetrap, when you can just go and buy, and brand it as your own?
But whatever the trends will be, in my view at least, the Cybersecurity industry will be one of the glowing industries in 2019 even if all of the financial markets go to pot. After all, the Cybersecurity landscape is constantly changing, and there are many new threats and variants of it that will be attacking both Corporate America and individuals alike.
We will always need innovative companies and people to create the solutions that will help to combat these kinds and types of Cyberthreats. Also, there is a huge worker shortage in the Cybersecurity industry, thus underscoring my hypothesis that it will be a red hot for years to come.
More than likely in 2019, we will still see some sort of merger and acquisitions still taking place, but that will be far outpaced by the growth and presence of the start up Cybersecurity companies.
In some ways, we could see this industry explode in this fashion like the .com bubble did in the late ‘90’s, but it will be far well overshadowed by the current levels of corruption and chaos that we are seeing with the Trump Administration.
In fact, many of my podcast guests are managers or C-Levels of Cybersecurity firms that they have actually started or co-founded with others. Some of them are well funded, having received some serious funding from either Venture Capitalists or Angel Investors.
The latter is also a trend we will be seeing more, but once again, the good news that happens on this front will once again be eclipsed as to what happens in DC.
Other industries may fall over in 2019, but Cybersecurity won’t. In fact, it could even very well be a recession proof industry, provided that there are Cyberattackers that are lurking out there.