The acquisition, their third this year, gives Bomgar a stronger presence in the midmarket and lower part of the enterprise, and will also upgrade their Canadian presence significantly.
Privileged access management [PAM] vendor Bomgar, which is owned by Francisco Partners, has announced the acquisition of fellow PAM vendor BeyondTrust. In addition to getting BeyondTrust’s assets, Bomgar will also take its name, effectively branding itself as the new BeyondTrust going forward. BeyondTrust’s sweet spot has been in the SME space, from between 2000 and 5000 employees, and this strengthens Bomgar there. While this is the main growth area of the market today, Bomgar’s main strength has been with larger organizations. BeyondTrust has a much larger comparative presence in Canada, and this will also strengthen the combined company in that space. The new company will continue to have a strong presence for its security business.
Matt Dircks, Bomgar’s CEO, will lead the combined company as CEO. Some of the BeyondTrust executive team will remain long term, while some will stay for the transition only. Kevin Hickey, BeyondTrust’s president and CEO, plans to stay for the transition period and then move on.
The acquisition of BeyondTrust comes subsequent to acquisitions of Lieberman Software In February 2018, and Avecto on July 10, and extends Bomgar’s transformation into a broad-based PAM specialist that can seriously challenge for leadership in the sector.
“Bomgar has a 15-year history, and originally started out as a remote support access company,” said Dan DeRosa, SVP of Product Management at Bomgar. “We supported companies and their help desks around attended endpoints with people. We became popular with ITSMs, growing to 15,000 customers and designed a platform specifically to do that. However, when we looked at how the platform was being used, we saw it was increasingly for least privileged access scenarios. So we entered the PAM market around privileged session management.”
The desire to expand within the PAM space led to the acquisition of Lieberman Software early this year, when Bomgar was still owned by Thoma Bravo.
“Lieberman brought us a credential management capability, in particular the ability to rotate passwords at scale with privileged identity,” DeRosa said. “This makes a customer almost impervious to phishing attempts because individual user passwords change.
The acquisition of Avecto, which just closed a month ago, after Bomgar was acquired by Francisco, added strength around privileged endpoint and privileged server solutions.
“It lets you lock down assets and govern who gets into them and the tasks they can perform,” DeRosa stated. “Bringing together those technologies let us manage access, which is the most common method of breach, through stolen credentials and misuse of administrative privileges given to end users.”
BeyondTrust brings greater strength broadly, but particularly in the lower part of the enterprise and the midmarket.
“When we bought Lieberman, we got an enterprise class product that scales to unbelievable levels,” DeRosa said. “What we didn’t have was a product we could sell to smaller enterprises. About 60 per cent of Bomgar’s business has been large enterprises, with the rest being SME. Going forward, our sweet spot is medium to large businesses. BeyondTrust has an appliance-based credential management product, PowerBroker, that we can stand up easily, and which integrates easily with other endpoint and management tools. Lieberman is a great product for large organizations, but it wasn’t everyone’s cup of tea. We can sell PowerBroker to many more customers. In addition, while Avecto is a Windows server solution, PowerBroker is also strong in Linux and UNIX, which are a larger part of the market. Now for every area of PAM, we will have a best-in-class product.”
The decision to rename the company reflects the fact that BeyondTrust is a stronger brand in PAM.
“Bomgar is still known as a remote support company, because of our 15 years in business,” DeRosa said. “We have over 40 per cent awareness there. In PAM, it’s more in the single digits. We would have to invest years in building the brand name around Bomgar. People also knew Lieberman and Avecto but they were single product companies. BeyondTrust has more cachet in PAM, and is as well-known as others in the space like CyberArk and Centrify. So the new BeyondTrust is how we will position going forward.”
The new company is much better positioned in the space.
“Francisco has been a great owner because they want to take bold moves,” DeRosa said. “Size-wise and portfolio wise we rival CyberArc and our intent is to be the leader in this space. The market as a whole is about $2.1 billion, and we are $310 million of that. The market has been growing somewhere between 22 and 29 per cent, with analysts differing, and Bomgar had been growing in the 20s as well. BeyondTrust brings in 4,000 customers, making us over 20,000 in total. There were very few areas of overlap.”
Most mergers and acquisitions in IT fail, but DeRosa said this one is a good fit from both a product and a culture perspective.
“We approached all these acquisitions from the perspective of customer value,” DeRosa said. “Customers looking for PAM have certain sets of needs. They want to get it from a supplier who is integrated. We look for companies with similar customer-oriented cultures and with best-in-class products. We did not add companies just to be bigger.”
The new BeyondTrust goes to market through a primarily channel model.
“When we did remote support, we used partners but when we got involved in PAM security we took an all-in approach with partners,” DeRosa said. “Lieberman was 100 per cent channel. Avecto was close. BeyondTrust has a strong channel, so the channel is going to be extremely important to our success, as it really has become the industry model. It allows us to be a product company and not have to be a services company as well.”
Last – but certainly not least – the acquisition strengthens the new BeyondTrust in Canada.
“Traditionally Bomgar has done a good business in Canada, with between 5-7 per cent of our total business, compared to 25 per cent in Europe,” DeRosa said. “However, BeyondTrust is much stronger in Canada. They have operations in Halifax and Ottawa, and have about 25 per cent of staff, mostly developers, in Canada. This gives us more of a presence in Canada, and we are looking forward to growing our presence there substantially.”