Here are 5 reasons Symantec is buying Blue Coat

Symantec is acquiring the Web security provider for $4.6 billion

As cyber threats diversify and expand, anti-virus provider Symantec is doing the same. Late Sunday, the company said it would shell out US$4.65 billion to acquire Web security provider Blue Coat. Here are five reasons the deal could make sense for Symantec.

1. Threats are evolving, Symantec needs to as well

Symantec has been selling PC antivirus products for years but the PC market has slumped and cyber threats are getting sneakier and more malicious. Two years ago, a Symantec executive even declared that antivirus were "dead." Nowadays, dangers such as zero-day exploits and ransomware are affecting businesses and consumers alike, and antivirus products can't keep up.

Complicating matters is the rise of mobile devices and the cloud. Today’s cyber attacks target anything with an Internet connection. In addition, entire businesses are now run on the web, and one successful hack can bring a company down.

Symantec needs to better guard clients from these latest attack types. Blue Coat provides networking and cloud-based security software, to build on the PC, email and data center products Symantec already has.

2. More products, more threats detected

Symantec hailed the deal as a good match and IDC analyst Chris Christiansen agreed, saying the companies' products "don’t have much overlap.”

Symantec has typically focused on device, or “endpoint,” security, while Blue Coat has specialized on the networking side, including managing encrypted traffic. By joining forces, Symantec said it can offer a whole range of products, promising better overall security and threat detection.

Every day, the vendors collect vast amounts of data on the latest threats. For Symantec, that means analyzing billions of emails and watching millions of PCs; for Blue Coat, it means monitoring thousands of cloud-based applications and over a billion Web requests through secure gateways.

Combining resources should give them a better view of where and how malware is attacking their clients.

3. Increased R&D

As hackers continue to innovate, Symantec needs more engineers to keep pace. The acquisition will result in a combined staff of 3,000 engineers and researchers, to help it stay ahead of the bad guys.

For its business clients, Symantec says it will be able to protect everything from devices to cloud applications. Currently, eight to 10 security vendors would be needed to address all those needs, Symantec COO Ajei Gopal claimed on Monday.

“In short, customers will be able to rely on Symantec to solve their most critical cyber security challenges,” he said.

4. A much needed boost to sales

Monday’s acquisition could inject some sales growth for Symantec at time when its business has been limping. In April, then CEO Michael Brown stepped down following poor financial results and amid growing competition.

To drive sales, Symantec hopes to sell its products to Blue Coat customers, and vice versa. Symantec has around 370,000 enterprise clients, while Blue Coat has 15,000.

“If Symantec just sells a small additional amount of product to their existing base, they will grow substantially,” said Christiansen.

5. A new CEO

As part of the deal, the CEO of Blue Coat, Greg Clark, will take on that role at Symantec -- becoming its fourth CEO since 2012. Gopal had been serving as interim president.

Although Symantec remains a leader in security, the company has been restructuring in a bid to improve profitability, Christiansen noted. Last year, Symantec decided to sharpen its focus on security and sold its information management business, Veritas, for US$8 billion. This latest deal with help it beef up again while still focusing on security.

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Michael Kan

IDG News Service
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