Amid Dell's pending buyout of EMC, lots of folks view VMware as the crown jewel within the deal. But don't overlook another potential diamond that could pay some dividends: RSA Security.
Indeed, many eyes will turn to EMC's security business as the RSA Conference 2016 approaches (Feb. 29-March 4, San Francisco). Ever since Dell announced plans to buy EMC for $67 billion, some pundits have openly wondered if Dell or EMC would sell off RSA.
No doubt, security is a hot market segment -- across the private and public sector. President Obama, for instance, wants to spend $19 billion on cyber security across the federal government in 2017, up from $14 billion in 2016. And overall global IT security spending remains strong.
Dell-EMC Security Strategy?
Together, Dell and EMC promote a range of security solutions via channel partners. Dell recently named FireEye veteran Steve Pataky as its new VP of worldwide security sales. And Dell just announced an identity and access management solution -- which should be particularly appealing to SonicWall partners.
The big question: Does Dell consider RSA to be a complementary fit for its security business -- or would it be easier and more lucrative to sell off RSA? So far, the answer to that riddle hasn't been publicly disclosed.
In 2014, RSA generated revenue of $1.035 billion, or 4.2 percent of EMC consolidated revenue of $24.4 billion, BankInfo Security notes. But more recently, RSA has been in transition mode. Without disclosing specific performance figures, David Goulden, EMC Information Infrastructure CEO, shared this brief anecdote during the company's January 2016 earnings call: "RSA continues to make progress to transition the mix and momentum in their business towards their growth areas. And for the year its growth portfolio was up double-digits."
What Goulden failed to say: How much of RSA's revenue is stuck in legacy mode, and how much now involves the growth portfolio?
RSA Conference 2016
More answers -- and plenty of speculation -- could surface later this month at the RSA Conference in San Francisco. Dell is a silver level sponsor for the event but it doesn't sound like the company will try to dominate the show.
More than an RSA-centric event, the conference is widely considered one of the largest security-related gatherings of the year. And that could be particularly interesting for a potential RSA suitor -- if Dell or EMC plans to sell off the business.
Already, Dell has announced plans to IPO its SecureWorks business. Is RSA next in line for a spinoff, sale or IPO? Partners and customers will be seeking answers at RSA Conference. But the full story may not be known until Dell actually completes the EMC buyout. Company leaders say the deal is expected to be completed between May and October 2016.
