Trend Micro To Acquire HP TippingPoint For $300M

Rumors of a possible sale of HP TippingPoint came true Wednesday, with Trend Micro disclosing its intent to acquire the security division from Hewlett-Packard for $300 million.

Reuters had first reported that HP was shopping around the business unit in September, as part of a move to thoroughly review its business units in advance of its split. The deal, now official, is expected to close by the end of fourth-quarter 2015.

The HP TippingPoint business includes next-generation intrusion prevention systems (NGIPS) and other network security components. The sale also will add real-time threat intelligence capabilities from TippingPoint's Digital Vaccine Labs and zero-day vulnerability research through the company's Zero Day Initiative. As the plan stands right now, all TippingPoint employees will be moved over to Trend Micro, the company said.

[Related: CRN's Mergers and Acquisitions News Page]

The acquisition is part of Trend Micro's strategic push to stake a leadership position in the enterprise security market for threat detection, COO Wael Mohamed told CRN. The market for threat detection is more important than ever today, Mohamed said, as traditional security has proven inadequate to stop attacks, evidenced by the continued onslaught of breaches. That trend is further enhanced, he said, by the changing topology of the network around software-defined networking and modernized data centers, as well as attackers learning to bypass emerging security technologies.

"We knew when we see the threat moving to more targeted, persistent and advanced threats, that we need to do more," Muhamed said. "We saw an opportunity to combine two important forces, next-generation IPS ... and advanced threat or breach detection."

Muhamed said the acquisition will be a win for Trend Micro partners, as it provides them with a single solution to capitalize on protecting clients from advanced persistent threats.

"Trend Micro is a very channel-friendly company," Muhamed said. "We are very committed to the idea that our channel value is providing added value to partners' customers, though services and so forth. We're committed to providing a solution in a way that [partners] can be [front-facing] to their customers with a complete solution."

Chris Ward, chief technology officer at Kittery, Maine-based LogicsOne, said the move is a good one for Trend Micro and for HP TippingPoint. He said he thinks Trend Micro will be able to drive more investment and focus around TippingPoint than HP has historically.

"Trend [Micro], being pretty much a pure-play security company, seems to be a reasonable caretaker for TippingPoint," Ward said in an email. "It will be interesting to see what they do with it over time."

TippingPoint will be incorporated into a new Trend Micro Network Defense business unit, which has been in stealth mode for the past three years at a $100 million run rate, and will combine capabilities around network IPS and breach detection into one solution. That's a similar approach to how Trend Micro successfully handled its Third Brigade acquisition in 2009, forming a data center business unit that propelled the company ahead of the market around cloud and data center security, Mohamed said.

"[TippingPoint has] the brand name, they have the customers, the expertise and the credibility. ... We have the knowledge, the threat intelligence and the endpoints around the world ... and a proven track record that we are the leader in breach detection," Muhamed said. "The combination is very logical."

HP and Trend Micro will continue to work closely together as "strong partners" after the acquisition closes, as they have in years past, the company said. HP will continue to sell the Trend Micro Deep Discovery platform, which previously was sold through its TippingPoint business, as well as continuing to resell TippingPoint, managed services and OEM activities.

As for HP Security, Jane Wright, senior analyst at Technology Business Research, said in a recent interview with CRN that the sale of TippingPoint will allow the company to move away from a market that is "a little more saturated" and focus on areas such as security analytics, where the company is looking to differentiate itself.

"I don't think it's any indication that HP is exiting security, in fact just the opposite," Wright said.

Muhamed said Trend Micro is "always open" to the idea of more acquisitions down the road, but they would have to be the "right thing for the customers."

"If there is the right acquisition and that is the right thing to do, we will evaluate it, but we won't acquire for the sake of acquiring," Muhamed said.

PUBLISHED OCT. 21, 2015