Trend Micro Snaps Up Third Brigade in Cloud Push

Internet security firm Trend Micro said today that it’s acquiring smaller security player Third Brigade, a move that aimed at beefing up its presence in the growing area of virtualization and private enterprise clouds.

The acquisition of privately held, Ottawa, Canada-based Third Brigade is expected to close quickly, in the second quarter of 2009, subject to the appropriate approvals. Terms were not disclosed.

Punit Minocha, Trend Micro’s vice president of corporate development, said the deal had been prompted by increasing signs that its enterprise customers were migrating to new technologies.

“Customers are being mandated to cut costs,” he said during a conference cal today to discuss the transaction. “They are being pushed in the direction of virtualization — even if they don’t know much about it — by top-down mandates.”

“It’s … about what’s going on in the marketplace,” he added. “We have been working with companies like VMware for a while to understand their direction and vision. We see Microsoft and Citrix moving in that direction as well. It’s about the movement of the marketplace as a whole.”

As a result, the acquisition aims to help the company better serve corporate customers who are making fundamental changes to their datacenters that challenge typical datacenter security measures.

“As our customers move to a private cloud in order to make their datacenters more dynamic by using virtualization technology, we need a new security initiative,” said Eva Chen, Trend Micro’s CEO and co-founder.

“Traditional security measures put security on the perimeter, but virtual servers can pop up in two minutes instead of two weeks, virtual servers can move to different network elements, and our customers could connect to the public cloud for overflows,” she said. “The whole industry’s infrastructure has changed. That’s why we are making this investment into the dynamic datacenter.”

Wael Mohamed, Third Brigade’s president and CEO, revealed some indications that the move could pay off handsomely for Trend Micro.

“We released our first product in 2006 and our revenue has doubled every year,” he said. “I can tell you that our average enterprise transaction is over $100,000 and several customers have spent over $1 million on licenses.”

It’s a match of compatible technologies and cultures, the companies said. They have already been working together for the past 18 months to integrate Third Brigade’s Intrusion Defense Firewall into Trend Micro’s Intrusion Detection System, or IDS , which is called OfficeScan, and pointed to synergies in other areas including PCI compliance.

Furthermore, while Trend Micro has a presence in the U.S., Third Brigade’s relationships with major Canadian enterprise and government customers will enhance its sales in North America, Minocha explained.

As a result of the acquisition, Third Brigade will become Trend Micro Canada and no layoffs are expected.

Third Brigade also gets to deliver its products to a global sales force, Third Brigade’s Mohamed said. “They will take us to heights that Third Brigade could not do alone.”

Trend Micro also promised full support for Third Brigade’s open source host-based IDS, OSSEC, and noted that the company has already posted an FAQ on the acquisition to the OSSEC Web site.

“We are committed to the open source community,” Minocha said. “We want to foster and grow that. We endorse and support the OSSEC community as well.”

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