Sophos buys Cyberoam for hardware expansion

Sophos Ltd. has made few secrets of its growth ambitions toward becoming a member of the security pantheon. Today, it took a major leap forward with the acquisition of India-based Cyberoam, a maker of wireless security solutions, security hardware and unified threat management (UTM) appliances.

The terms of the deal were not disclosed, but the merger of the two companies is significant. Sophos became a hardware vendor in 2011 when it acquired Germany-based Astaro. It was already a secondary player in the security software market with its midmarket and enterprise , and encryption products. With Cyberoam, it’s picking up hardware, more than 5,500 partners around the world and a presence in major Asian markets.

“Our goal in coming together is very simple: to expand and accelerate on the success that each company is already enjoying today,” wrote Sophos CEO Kris Hagerman in his blog. ”According to IDC, the UTM market is approximately $2.5 billion and growing at 20 percent per year. Both Cyberoam and Sophos are performing very well in the UTM market, and outgrowing our competitors. But our ambition is to become a much larger player in network security — not only in UTM, but in a number of exciting adjacent markets that are growing as fast or even faster, like next-generation (NGFW), advanced persistent threat (APT) protection, and wireless security.”

When the deal closes, the combined Sophos and Cyberoam companies will have more than 2,200 employees, including more than 600 focused on network security and 350 in research and development.

Sophos has been increasingly aggressive over the last year, not just with the emphasis placed on hardware sales, but also with the launch of a cloud-based security service and the expansion of its sales team. A year ago, Sophos hired industry veteran from Fortinet to drive sales execution. The company also hired channel veteran away from Fortinet.

A byproduct of this aggressiveness and sign of Sophos’s rise is the recently filed lawsuit by Fortinet over employee poaching. Sophos recently opened a Silicon Valley office and, as asserted in the lawsuit, has been improperly recruiting talent from Fortinet ranks.

Adding Cyberoam will substantially expand Sophos’s capabilities and potential, making it a threat to more than Fortinet. Hagerman’s comments clearly place Sophos on a course to take on next-generation firewall vendors such as Palo Alto Networks and Cisco Systems Inc. Sophos will also be seen as a competitive threat to other UTM vendors, such as Technologies Inc. and Dell Inc. And it will put Sophos more clearly on the radar of McAfee — soon to become Intel Security.

“Together Sophos and Cyberoam form a powerhouse in network security,” writes Cyberoam CEO Hemal Patel. ”We are growing our network security businesses substantially faster than the market, and joining forces allows us to drive even greater innovation and value. Our global footprint, commitment to the channel and complete security portfolio are clear competitive differentiators.”

More significantly, Sophos’s expansion into hardware and the diversification of its portfolio is drawing distinct separation from other security software vendors. It now has as broader portfolio than Kaspersky Lab and ESET, and it’s taking a different development direction than Technologies, which is plying IT automation as its next evolutionary phase.

Since joining Sophos in 2012, Hagerman promised to transform the U.K.-based security vendor into a dynamic provider of midmarket and enterprise security solutions. The strategic initiatives taken in cloud, encryption and now hardware shows Hagerman and his team are diligent in fulfilling their promise.

This article first appeared on Channelnomics.com.

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