Dell announced Tuesday its intent to acquire managed security services provider (MSSP) SecureWorks for an undisclosed amount. SecureWorks, which acquired VeriSign's Managed Security Services in July 2009, has been growing their business significantly over recent years. Dell on the other hand, has been strengthening its services arm and moving towards a more solutions-centric approach. SecureWorks will continue to act as a separate business unit and will maintain its offerings, keeping its consulting and services intact. This deal was surprising but not shocking. As information security becomes an integral part of the infrastructure, large system vendors strive to build or buy security capabilities into their products and services. Here are our initial thoughts on the acquisition:

• Dell builds a security foundation through SecureWorks capabilities. Dell doesn’t have a strong security presence - And similar to the RSA/EMC acquisition, SecureWorks will become the security division of Dell. This acquisition will enrich Dell’s portfolio with a well-respected managed security services company with expertise in threat intelligence, infrastructure security, and strong customer service.
• SecureWorks and Dell find new revenue streams through security offerings. Infrastructure security is becoming ever more important as organizations embrace data center consolidation and the cloud. SecureWorks offerings will strengthen the business case for Dell while keeping customers secure. On the other hand, SecureWorks will find new industries and geographies beyond government, utilities, and retail services.

While we believe that overall this is a good acquisition, it remains to be seen how well Dell will execute on integrating SecureWorks’ capabilities while maintaining a standalone MSSP offering. Here are few pieces of advice for Dell:

• Integrate consulting services. Managed services are unable to flourish without a strong consulting arm. While Dell is developing its professional services business, it should utilize the expertise and experience of SecureWorks to embed security into its professional services portfolio.   
• Don’t spread yourself too thin. One of the reasons Dell acquired SecureWorks was to expand its security footprint for existing customers. While this is a good long-term goal to have, it is important to recognize that the existing SecureWorks customers should be their short-term priority. Focus on keeping them happy and satisfied.
• Keep current employees and maintain existing relationships. Dell needs to ensure that it not only retains, but nurtures the talent it has acquired and integrates these employees into the Dell organization quickly. Keep the focus on customer relationships and do not make too many changes to the existing account structures for SecureWorks or Dell too soon.
• Emphasize sales force training at the beginning. It is tempting to start selling the new product (MSS in this case) right away, but unless both sales teams are trained adequately this could backfire. Make sure you take your time integrating sales activities.

In summary, this is a good acquisition for Dell clients because it offers them the ability to get security services from a trusted partner. It’s also a great opportunity for existing SecureWorks clients, providing them with the financial assurance and resources of a large fortune 50 player instead of a standalone MSS provider. What remains to be seen is how well Dell can integrate the competencies of SecureWorks and how it will serve some of the sophisticated MSSP customers that SecureWorks previously acquired from Verisign.  

Now that we’ve shared our initial take on this acquisition, we’re interested to hear your thoughts. 

Khalid Kark and Usman Sindhu