Despite hot M&A activity, security innovation is safe


The rise of cloud computing, the smart grid and social media is prompting a new wave of cybersecurity innovation, an SC World Congress speaker said during a panel discussion Thursday.

Elad Yoran, CEO of Security Growth Partners, which advises security companies on growth strategies, said that following roughly a decade of limited innovation due to a compliance-driven marketplace, a number of emerging technologies are now forcing vendors to create leading-edge solutions.

"I never really liked the world of checklist-based security," said Yoran, who founded managed security services provider RipTech before selling it to Symantec in 2002 for $145 million.

But if history is any guide, these innovative firms quickly will be scooped up by cash-rich tech companies and systems integrators.

This year has seen 133 security-related deals, said Alberto Yepez, managing director of Trident Capital, a venture investment firm, who joined Yoran on the panel.

"It's merger mania," he said.

Yoran said that for many larger suppliers, acquiring best-of-breed vendors is like "outsourced" research and development.

The panel noted that few security vendors have gone public in recent years, but that is not necessarily telling of anything, Yepez said.

Whether it is an IPO or an acquisition, these deals are just a "means to an end for liquidity," he said.

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