Dell Technologies sells RSA Security for $2.1B

Dive Brief:

Dell Technologies is selling its cybersecurity arm RSA Security for nearly $2.1 billion to a consortium including Symphony Technology Group, Ontario Teachers' Pension Plan Board and AlpInvest, according to a company announcement Tuesday.
The all-cash transaction includes RSA Archer, RSA NetWitness Platform, RSA SecurID, RSA Fraud and Risk Intelligence and RSA Conference, according to the announcement. The company expects the deal to close within six to nine months.
As Dell Technologies is focusing on automating and implementing intelligent security into its solutions, "the transaction will further simplify our business and product portfolio," Jeff Clarke, COO and vice chairman of Dell Technologies, said in the announcement.

Dive Insight:

In a five-year period, Dell Technologies went public to private and then back to public.

In 2016, Dell bought EMC for $67 billion, cementing Dell Technologies as a tech giant. RSA, which was owned by EMC, became Dell's.

In 2018, Dell Technologies bought nearly $22 billion in shares of VMware's tracking stock, which allowed the company to avoid making another initial public offering. It also allowed the company to hold onto 81% of its common stock ownership. The company viewed its market reversion as a way to simplify its infrastructure.

EMC rounded out Dell Technologies' product portfolio, which resulted in redundancies. The company is still looking for its niche as a tech vendor and owns specialist companies outside the core computer hardware and storage solutions.

Dell Technologies' portfolio includes RSA; software and services company Pivotal; threat intelligence provider Secureworks; cloud computing management company Virtustream; and iPaaS tools and solutions provider Boomi.

Those segments "do not meet the requirements for a reportable segment, either individually or collectively," according to Dell Technologies' 2019 annual report. By contrast, VMware, reportable segment of Dell Technologies, is a disruptive business continuing to grow.

While Dell Technologies is divesting RSA, its position in the cybersecurity market is strong.

RSA is a leader in Gartner's Magic Quadrant for integrated risk management solutions and vendor risk management tools. RSA Archer is a "mature platform" but lacks an "out-of-the-box functionality" used by smaller organizations, according to the research firm. The offering is also primarily deployed on-premise or hosted models. RSA solutions, while "robust," have a "complex platform, according to Gartner.