NetApp Scoops Up Storage Encryption Player

Network Appliance agreed to acquire storage security specialist Decru for $272 million in cash and stock in a deal to help corporations defend their data from prying eyes.

NetApp CEO Dan Warmenhoven had to defend the purchase on a conference call with analysts, explaining that the company has no plans or need to integrate Decru technology into its portfolio. DataFort machines and software will be offered as standalone products.

In other words, the deal does not signal a major strategic shift for NetApp, which already boasts a strong lineup of data protection products, including systems for disk backup and recovery, software for data replication, mirroring, and restoration; and systems and software to shield businesses from Internet viruses and attacks.

“The combination with our larger sales force, channels and broader account base will accelerate sales in both government and commercial accounts,” Warmenhoven said. “We really feel that this has the potential to be a fast-growth market segment.”

Redwood City, Calif.’s Decru is a leading purveyor of storage security appliances, encrypting data at wire speeds without choking performance. The company’s DataFort appliances protect data that rests behind the firewall, a departure from firewalls and other forms of network security that protect moving data on the perimeter.

This is important because recent FBI research indicates that as much as 80 percent of all data attacks occur on so-called data at rest.

Sales of Decru DataFort machines have been snowballing in the wake of a series of data security scares. Privately held Decru isn’t required to releases revenue numbers, but analysts said business has been booming for storage security players in the wake of recent security scares.

Banks such as CitiFinancial and Bank of America have had to deal with lost tape cartridges that store customers personal information, including Social Security digits and credit card numbers.

While difficult, perpetrators with the technical know-how could get hold of the tapes, which are not encrypted, and pilfer sensitive information to wipe out bank accounts or make fraudulent purchases.

The encryption technology on Decru devices stop malicious intruders dead in their tracks and helps customers meet compliance regulations for preserving data.

DataFort boxes are also attractive because of their flexibility: They run on a variety of vendors storage systems in NAS, direct-attached storage (DAS), SAN, iSCSI and tape backup environments. Moreover, the boxes pretty much plug right into the network, requiring no changes to servers, desktops or applications.

The purchase is a natural fit for NetApp, which has worked with Decru over the last year to offer companies and government agencies storage infrastructure to help them safeguard their data and comply with regulations.

Earlier this month, NetApp and Decru unveiled an integrated platform for secure processing and storage of credit card data in compliance with Visa and Mastercard Payment Card Industry (PCI) security standards.

Their tight partnership will allow NetApp and Decru products to protect data stored on third-party disk and tape systems. Moreover, Decru will maintain its relationships with storage vendors and networking vendors, some of whom may be NetApp rivals.

Enterprise Strategy Group analyst Jon Oltsik praised NetApp forward-looking mindset.

“It demonstrates how forward-thinking NTAP is compared to the storage mainstream,” Oltsik said. “Most storage vendors can’t spell ‘security while users scream for solutions. NTAP will gain competitive advantage through this deal.”

NetApp will pay 80 percent stock and 20 percent cash for Decru, expecting to close the deal by October. Decru 73 employees will continue to operate the company as a separate business unit led by current CEO and President Dan Avida.

The acquisition could be the first in a chain reaction of storage security purchases from NetApp rivals and allies alike. Storage vendors such as IBM, EMC, HP and HDS may take NetApp cue and purchase Kasten Chase, NeoScale or Vormetric.

Article courtesy of InternetNews.com