Dell Exec: We're Not Out Of The Security Game, Despite Sale Of Software Group

With the spinoff of its Software Group earlier this week, Dell divested itself of a significant portion of its security assets. The question now is, what is to become of the rest of Dell's security portfolio, and its addition of RSA as part of its pending acquisition of EMC?

Dell said Monday that it had agreed to sell its software division to private equity firm Francisco Partners and the private equity arm of activist hedge fund Elliott Management for $2.4 billion. The division includes some of its major security lines, such as Quest Software and SonicWall.

Dell had previously filed for the initial public offering of its SecureWorks security services business and announced the March sale of its Perot Systems IT services business to Japan-based NTT for more than $3 billion.

[Related: Partners Not Worried About Dell Deal To Resell SonicWall After Private Equity Sale]

However, the divestitures don't mean Dell is out of the security game entirely. The company has maintained its client security business, part of its $35.9 billion client solutions business. That business includes Dell Data Protection and Dell Endpoint Security Suite. Those solutions include encryption, authentication and advanced threat protection.

"This does not affect us at all," Brett Hansen, executive director, Dell Data Security Solutions, said in an interview with CRN. "We see an opportunity in the marketplace to continue to build agnostic software, but with a strong sense and commitment to software sold intimately with PCs and a "better together" type story."

Dell also maintains a majority ownership stake in SecureWorks, even after the IPO, as well as an OEM agreement with network security division SonicWall.

Hansen said Dell is seeing a "steady uptake" in the number of partners selling the solutions, of which around 25 percent of sales come from the company's Endpoint Security Suite. Hansen said that Dell is working to expand those capabilities, in 2017 looking to add backup and recovery, EDR, prediction and prevention, and multi-factor authentication.

Hansen said it was still too early to discuss how security components of EMC would fit into Dell, namely RSA. However, he said "we complement each other very well," particularly around mobile device management (MDM), mobile security, two-factor authentication and EDR (most of which were also listed as capabilities Dell would be looking to expand in the coming year).

Sources had told CRN before the company's acquisition announcement by Dell that EMC had been in serious discussions to either sell or spin off RSA as an independent company, with an aim for an IPO. Last winter, RSA President Amit Yoran sent a letter to EMC staff about a meeting held with Dell CEO Michael Dell, discussing the RSA business and where that fits into the Dell ecosystem. Creating growth in security is a business that Dell clearly understands, Yoran wrote at the time.

"Michael is also aware of our transformation activities [at RSA] and very supportive. He is keen to continue learning more about RSA and come up with meaningful ways EMC, Dell and he can contribute to our success in the future," Yoran wrote in the December letter. "It's all about creating leverage and accelerating our growth."

Michael Goldstein, CEO of Fort Lauderdale, Fla.-based LAN Infotech, said the breadth of the RSA and EMC lines around security brings in a whole new wave of security solutions into the Dell portfolio. Goldstein said he expects some of those lines will get spun out as they are integrated in with Dell's current offerings.

"There's a whole bunch of things that have to find a place," Goldstein said.

As a partner, Goldstein said, it remains to be seen where all these pieces will fall into place and what sort of security portfolio will ultimately emerge from Dell.

"I guess we will have to see. There's a lot of movement," Goldstein said. "It's going to be an interesting month," he said.