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Why Is Symantec Buying Blue Coat Systems?

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Symantec has announced the acquisition of Blue Coat Systems

Blue Coat Systems is a web security company in the cybersecurity space. Symantec is a leading player in antivirus software that runs on PCs (personal computers). It has largely kept its focus on on-premises security. Blue Coat, on the other hand, is focused on the web and cloud security space. Its technology is being used by more than 15,000 companies to block dangerous or inappropriate websites.

There’s little overlap in both companies’ offerings. Dan Schulman, chairman of Symantec, commented on the Blue Coat deal: “Together, we will be best positioned to address the ever-evolving threat landscape, the massive changes introduced by the shift to mobile and cloud, and the challenges created by regulatory and privacy concerns.”

Schulman also said, “With this transaction, we will have the scale, portfolio and resources necessary to usher in a new era of innovation designed to help protect large customers and individual consumers against insider threats and sophisticated cybercriminals.”

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Symantec’s acquisition of Blue Coat is the largest in more than a decade

Blue Coat marks Symantec’s largest acquisition since 2005 when the company acquired Veritas for $13.5 billion. On January 29, 2016, Symantec completed the sale of Veritas to The Carlyle Group for $7.4 billion, which was less than the earlier agreed upon $8 billion.

Apart from Symantec, technology players such as Hewlett-Packard (HPQ) and eBay (EBAY) have been forced to give in to rising investor pressure and announce splits. EMC (EMC), which was considering a buyout by its own subsidiary VMWare (VMW) is in the process of becoming part of Dell in the biggest technology acquisition to date.

Symantec’s acquisition of Blue Coat is the company’s way to march ahead in the cybersecurity space. With Blue Coat, Symantec intends to develop into a leading enterprise security player. Symantec is reeling under the pressure of no revenue growth.

The ever-changing IT (information technology) scenario fueled by the SMAC (social, mobile, analytics, and cloud) revolution is also worsening the situation. Through the Blue Coat acquisition, Symantec intends to tap the increasingly competitive security market, hoping that together the companies will fare better than operating alone.

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Next, let’s see how the Blue Coat acquisition could benefit Symantec.

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