$90M For Data Loss Prevention Makes Websense

Security software maker Websense  agreed to
buy partner PortAuthority Technologies for approximately $90 million
in cash to stake its claim in the emerging market for preventing information

PortAuthority is one of a handful of startups making information-leak
prevention software, which prevents perpetrators from taking information
from within the confines of the company.

The company writes PreciseID data-fingerprinting software that lets
companies manage how confidential data is permitted to leave an organization
and under what circumstances.

Websense makes ThreatSeeker software that filters out external
Internet-based security threats, such as viruses and worms, before they have
a chance to steal business information from customers or impinge on IT

The combination of Websense and PortAuthority software will protect
customers from outsiders, as well as from disgruntled employees or a person
who covertly sneaks into an office and tries to tap into computer systems.

The deal builds on an existing OEM technology alliance.

In September, Websense agreed to license PortAuthority’s PreciseID as the
backbone technology for Websense Deep Content Control software, which acts
as a “digital data guardian” to help control how sensitive data can leave
the organization and under what circumstances.

Websense Deep Content Control provides security administrators with a deep
knowledge of Internet destinations, protocols and applications, along with
detailed fingerprints of internal data to protect outbound, internal and
Web-based e-mail; Web postings; instant messaging; file transfers and
network printing.

Websense CEO Gene Hodges said on a conference call he believes
PortAuthority’s technology is a “good fit with our current business,” and
said the “potential synergies between the two companies were significant.”

He also said the market for data-loss prevention is likely to grow far
faster than the content-filtering offerings Websense currently provides.

To be sure, the acquisition is rooted in the notion that the majority of
major security problems don’t arise from worms or viruses, but from people
lifting sensitive information from computers.

Hodges also said Websense wanted to make the deal before consolidation took
hold of the information-leak prevention space. For example, another acquirer of PortAuthority could have posed a serious threat to Websense’s OEM deal.

“We protect ourselves by owning this technology,” Hodges said.

In October, McAfee  snapped up
data-loss-protection player Onigma; Hodges said Symantec  and others are rumored to be making a move in this nascent, multi-billion-dollar security software niche.

IDC claims the market for data-centric content control will grow from $194
million in 2007 to $434.6 million in 2009.

Hodges said Websense intends to keep most of PortAuthority’s 60 employees,
including those in the PortAuthority’s Palo Alto, Calif., headquarters and
the company’s research and development team in Ra’anana, Israel.

The purchase is expected to close in January.

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