Sophos-Secureworks Merger: 5 Big Partner Takeaways

Solution providers applauded Sophos’ planned acquisition of Secureworks, an XDR specialist with 1,500 employees.

Solution providers applauded the announcement Monday that cybersecurity giant Sophos plans to acquire Secureworks, a specialist in extended detection and response (XDR), for $859 million in a major industry consolidation deal.

Calling the acquisition deal a “very positive” move for Sophos, BizCom Global CEO Mark Wiener said it’s clear that “there's some real value in these players coming together” at a time of growing competition in areas such as XDR.

[Related: 5 Major Security Vendors That Could Be Acquired By Private Equity]

Ultimately, there’s no question that “consolidation is going to continue” in the security industry, Wiener said.

Sophos said that the all-cash acquisition for publicly traded Secureworks, which employs 1,500, is on track to close by early 2025.

What follows are five big partner takeaways about the planned Sophos-Secureworks merger.

Doubling Down On SMB Security

Solution provider executives told CRN the planned acquisition of Atlanta-based Secureworks is a strong sign that Abingdon, U.K.-based Sophos and its private equity owner, Thoma Bravo, are committed to investing in security for SMB and midmarket customers.

Sam Heard, president of Data Integrity Services, a Sophos partner based in Lakeland, Fla., said he’s “very optimistic” that the merger will help to advance the cause of SMB security. “I’m a huge proponent of the SMB market space” when it comes to security, Heard told CRN, and the integration of Secureworks’ capabilities appears to be a positive direction for Sophos’ efforts around protecting smaller businesses.

Jason Slagle, president of Toledo, Ohio-based CNWR, said there’s no question that “small business continues to be behind the curve as far as security goes.”

The Sophos deal for Secureworks appears positioned to bring additional security offerings that are attractive to the SMB and midmarket, Slagle said.

Bolstering Detection And Response

A major focus of the acquisition is around bringing together XDR capabilities — which offer detection and response to threats in environments beyond the endpoint — from Secureworks with Sophos’ own XDR platform as well as its EDR (endpoint detection and response) and MDR (managed detection and response) offerings, according to Sophos.

Solution providers said this is a smart move for Sophos at a time of heightened competition in the detection and response market.

BizCom Global, a Raleigh, N.C.-based partner of Sophos, does not currently use the vendor’s EDR or MDR, Wiener said. However, the acquisition of Secureworks “would give me a reason to go look at it,” he said.

“I think this could be a real value for Sophos in the end — being able to strategically focus in on the areas where they have product, but it may not have been best of breed,” Wiener said.

Heard said the acquisition should provide a major upsell and cross-sell opportunity for Data Integrity Services. Being able to present customers with a set of “enhanced capabilities, and a broader set of solutions and features” from the Secureworks acquisition is a big win, he said.

Channel-Friendly Move

In its news release announcing the deal for Secureworks Monday, Sophos noted that both companies operate as “partner-centric” vendors, and that an expected outcome of the merger is to generate “greater value within the channel.”

Heard said that while his company hasn’t partnered with Secureworks in the past, he’s been aware that the vendor is a “channel-driven company” — which holds promise for the combination with Sophos as a similarly partner-friendly vendor.

“Sophos has been extremely good at listening to the channel, listening to the partners, being more nimble in their response to the channel’s needs,” he said. “This [acquisition] could be part of strengthening and bring in more features for partners.”

Heard also called the deal an “excellent move” for Sophos CEO Joe Levy five months after being appointed to the permanent chief executive role.

“I’m extremely optimistic with Joe being at the top,” Heard said.

Good Outcome For Secureworks, Dell

In August, Reuters had reported that Dell Technologies — which is the majority owner of Secureworks — was mulling a possible sale of the vendor.

The planned sale of Secureworks to Sophos appears to be a good outcome of that process, solution provider executives said.

While Secureworks has had a strong track record in recent years for “staying ahead of the marketplace” in terms of capabilities, it was clear that Dell was looking to move on, said Nathan Trail, executive vice president of sales at Core BTS, an Indianapolis-based partner of Secureworks and No. 131 on CRN’s Solution Provider 500 for 2024.

“I think it’s good for Secureworks in the long term,” Trail said.

Sophos declined to comment when asked about whether Secureworks is expected to remain a standalone brand after the closure of the deal.

Meanwhile, the fact that the deal is an all-cash transaction will also be something to watch for in terms of Dell’s next moves, Trail said.

“They clearly have plans for that cash,” he said. “It’ll be interesting to see what Dell is planning on doing.”

Countering Growing Threats

The intensifying threat landscape — driven by a variety of factors including the arrival of generative AI technologies that bolster social engineering — is another reason why it makes sense for threat detection vendors to consolidate their capabilities, solution provider executives told CRN.

The rise of new AI-powered threats is a “big concern” for every CISO, Trail noted.

And while existing tools — even including OpenAI’s ChatGPT — are already capable of being exploited to enhance cyberattacks, there’s no question hackers will build “more powerful, smarter tools” with the technologies going forward, he said.

Secureworks and Sophos will likely be stronger together in terms of helping partners and customers to defend against such threats, Trail said.

Without a doubt, threat actors are increasingly seeking to target SMB and midmarket customers on the assumption that they are not protected with the latest security capabilities, CNWR’s Slagle said.

Ultimately, Slagle said the acquisition of Secureworks will help Sophos to provide a “compelling” offering for SMBs and the midmarket in this challenging threat environment.

In a quote included in the news release Monday, Levy pointed to Secureworks’ Taegis XDR platform as a key asset for the acquisition that will be combined with Sophos’ MDR offering.