Does Symantec’s Acquisition Spree Indicate a Trend in the Security Space?
Strategic acquisitions to boost position in competitive cybersecurity space
Earlier in this series, we discussed Symantec’s (SYMC) latest acquisition of Fireglass and Skycure in the current quarter. Symantec has been on an acquisition spree and looking at its increased M&A (mergers and acquisition) activity, we believe this trend could continue in the near future.
In 2016, Symantec announced billion-dollar acquisitions of Blue Coat Systems and LifeLock. While Blue Coat Systems strengthened Symantec’s profile in web security, LifeLock bolstered the company’s credentials in the identity theft protection space. Blue Coat Systems’ acquisition in mid-2016 was viewed as the most significant acquisition in the cybersecurity space so far.
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Cisco Systems (CSCO) tops the list in terms of making the most acquisitions in the cybersecurity space. Cisco Systems is followed by Symantec, as the chart above shows.
The rapid growth expected in the cybersecurity space has urged major technology players such as Microsoft (MSFT), IBM (IBM), Dell-owned EMC, Intel (INTC) and Google (GOOG) to compete in this space to enhance their presence in the cybersecurity space.
Factors in the cybersecurity stock surge
Cybersecurity stocks such as Symantec, Cisco Systems, and FireEye (FEYE) received a boost in 1H17 by the WannaCry and NotPetya ransomware attacks. These ransomware attacks exploited vulnerabilities, which were first detected by the NSA (National Security Agency) and released by hackers to attack governments and organizations around the world.
However, Europe (EFA) and Asia were the worst affected by these attacks. Cybersecurity stocks experienced a surge as these attacks expedited consulting efforts and upgrades as businesses increasingly focused on network protection.
However, an opposite effect cannot be ruled out. Many businesses might have opted to delay their major security purchases as they considered whether they had improved security plans before moving forward.