November 30, 2007

Running to the Exits

Whoever said "these are interesting times that we live in" must have been talking about the Data Loss Prevention/Information Loss Prevention market. In four short months four of the startups have been taken out of the game by big security companies. Toward the end of October Trend Micro announced its plans to snap up Provilla whose client side DLP technology has been out on the market since only January. But the bigger news came less than two weeks later when Symantec announced its (long rumored) $350M acquisition of Vontu -- the earliest DLP/ILP vendor and the one which got the most customer traction. Symantec has a long history of making acquisitions and then taking a year or so to "Symantec-ize" them into the product line, so it will be interesting to see what comes out of this acquisition. The good news is that finally a decent sized liquidity event occurred in this space. There have been plenty of startups focused on saving the corporate world through DLP/ILP technology, but there wasn't much in the way of adoption (as we've noted here before, market growth in this space has been anemic compared to other security segments). Vontu seemed to be the player with the most traction, especially in the financial services market segment where its product was a good fit. Even they seemed to be growing slower than their investors would have preferred. But in the end, you can't argue with a $350M outcome.

                                          DLP/ILP Hall of Fame

Date

Acquiree

Acquirer

Amount

Estimated Sales Multiple

10/06

Onigma Ltd

McAfee

$20

?

12/06

Port Authority

Websense

$90

20x+??

8/07

Tablus

EMC/RSA

???

???

9/07

Oakley Networks

Raytheon

???

???

10/07

Provilla

Trend

???

???

11/07

Vontu

Symantec

$350M

12x??

Total

$460+M

And The Beat Goes On

New things continue to happen in the DLP/ILP arena. Despite all the liquidity events, there are still startups in this category that are doing interesting things. Toward the end of October, DLP/ILP vendor Workshare introduced what it called its Unified Content Protection (UCP) solution which, in addition to other functionality, adds full disk encryption capability to an ILP client. As we've mentioned here before, although the full disk encryption market started at about the same time as the ILP/DLP segment, it grew at a much faster rate and clearly was more broadly accepted. So combining DLP with full disk encryption on the same client platform sounds interesting.