Security companies remain hot and urgent

For sale: A technology security company. Which one? There are a lot of them.

Photo: Security companies remain hot and urgent

Companies that specialize in computer security are being snapped up at a furious rate. The latest one is SPI Dynamics Inc., a privately held company based in Atlanta that Hewlett-Packard Co. said Tuesday it had bought for an undisclosed amount.

SPI's software scans Web sites and internal corporate programs for potential security holes. SPI's customers include the federal government and financial companies.

The deal comes two weeks after HP's biggest rival, IBM Corp., acquired Watchfire Corp. for more than $100 million (75 million EUR). Watchfire is the top player in computer application security, while SPI is No. 2, Forrester Research analyst Chenxi Wang said.

Sandeep Johri, who heads HP's strategy and corporate development, said buying SPI "was not by any chance a response" to IBM's Watchfire deal.

Even so, there is undoubtedly a race to snatch up security technologies.

Last year IBM spent $1.3 billion (0.97 billion EUR) to pick up Internet Security Systems Inc., while data-storage giant EMC Corp. shelled out $2.1 billion (1.57 billion EUR) for RSA Security Inc. Not just computing companies are interested: last year telecommunications carrier BT Group PLC bought network monitor Counterpane Internet Security Inc.

Security companies figure to remain hot for simple reasons: Hacking threats are getting more sophisticated and potentially costlier as more and more crucial business information moves online.

"There are many point products in the security space that started out as small startups," Wang said. "I think the big players have a lot more companies to snap up in various segments of security."

The trick now is for big tech vendors like HP and IBM to incorporate those security technologies into other products. For example, SPI's security-scanning technology can be combined with HP's Mercury software that tests the performance of corporate computing applications.

"What's becoming evident is that security is less and less a standalone component," said Peter McKay, Watchfire's CEO. "It's becoming a feature of something else."