Proofpoint Top Exec Maintains Security Vendor Won't Be Acquired Anytime Soon

If you recently read a prediction naming blockbuster acquisition deals that could happen in 2016, it is likely that Proofpoint was one of the companies on the list. But despite the rumors, Tracey Newell, executive vice president of worldwide sales for the security vendor, told CRN an acquisition isn’t likely.

A recent report by Daniel Ives, FBR managing director and senior analyst, put Proofpoint on its list of companies that could be bought in 2016, naming the likely potential buyers for the Sunnyvale, Calif.-based vendor as Cisco, Microsoft, Hewlett Packard Enterprise and Oracle Acquisition-hungry Symantec has also be named by analysts as a potential suitor.

In an interview with CRN at the company’s headquarters last week, Newell said she "can't control what people write" about the company. While deferring to CFO Paul Auvil for a more concrete answer on the company's plans, Newell said CEO Gary Steele has said he is focused on "building a company for the future."

[Related: 6 Blockbuster Security Acquisitions You Could See In 2016]

"There’s no question: We've seen tremendous growth in the industry and we're pleased by that," Newell said. "We believe that there will be a new set of next-generation security companies [emerging] as a result of what's happening with the traditional incumbents. We fully intend to be one of them."

The company last week revealed its partnership with Palo Alto Networks, which shares threat intelligence by integrating Proofpoint’s Targeted Attack Protection solution and the Proofpoint Social Patrol solution with Palo Alto’s Wildfire.

"We're really pleased with how we're being recognized in the market," Newell said about the partnership. "It's a really compelling story."

The company also landed a lucrative deal with Intel Security, serving as the partner of choice for customers and partners affected by the other security vendor's recent email product end-of-life announcements. That deal is a multimillion-dollar opportunity for Proofpoint, Newell said.

Jane Wright, senior analyst for security at Technology Business Research, said Proofpoint is one the companies that she has been evaluating as a possible acquisition target. However, she said the massive deal with Intel Security could put the vendor in an interesting position to pick up the slack as other vendors divest product lines.

Kevin Pouche, chief operating officer at Brookline, Mass.-based K Logix, said that as a Proofpoint partner, he would like to see the vendor remain independent.

"A company like ours, we're more successful if they remain independent," Pouche said. "I'd like to see them both acquire more technology themselves and continue to grow, or invest in partnerships, like this one with Palo Alto Networks."

Pouche said he would be "surprised" if the vendor wasn't being pursued by companies such as Symantec and Cisco, as it has established itself as a clear leader in its markets in recent years. However, Pouche said, acquisitions by big vendors are not always absorbed as smoothly as partners would like, causing the technology to suffer in the long run.

"If they were purchased by one of these huge companies, what you tend to see is that over time, the technology starts to fall behind and they are no longer a bleeding edge when it comes to technology. You've just seen it again and again. I would rather see them maintain their focus and add more partnerships like Palo Alto and add new technologies," Pouche said.

In the past year, Newell said, Proofpoint has seen considerable success with its evolving channel program, after a recent revamp to reward partners who invested in the security vendor. She said Proofpoint will continue to invest in its channel, particularly globally, where it looks to expand further into the European, Australian and New Zealand markets.

Newell said Proofpoint also plans to continue augmenting its technology portfolio, building on investments it made in 2015 around stopping advanced threats as well as in email, social and mobile security. Those areas are growing in importance in the market, she said, presenting a "tremendous opportunity" for Proofpoint.

"We have the ability that we can triple the company just through selling the existing portfolio," Newell said.

PUBLISHED JAN. 25, 2016