EMC and Network Intelligence: What it Means.

Just as the dust was clearing from its acquisition of RSA, the folks at EMC jumped further into the security fray by grabbing leading Security Event Management (SEM) player, Network Intelligence. What are the implications of this acquisition?

1. EMC sees an enterprise opportunity. The security market is full of technogeeks and tactical point tools. For example, Check Point is thought of as a security industry leader yet it did just under $600 million in revenue last year. By comparison, EMC does more than $600 million in revenue each month. EMC understands that large companies are sick of gluing together their security infrastructure and want some real enterprise solutions so it is pursuing a "string of pearls" acquisition strategy to get there quickly.

2. SEM has entered the big time. Three years ago, most enterprises were "rolling their own" SEM but now they are buying solutions from companies like Network Intelligence. In the last few months, Novell bought e-Security and IBM got GuardedNet through its acquisition of Micromuse. Cisco grabbed Protego about and year ago and rumor has it that Oracle is about to buy either NetForensics or Intellitactics. It's likely that HP, McAfee, and BMC are looking at other leaders like LogLogics as well as network behavior specialists like Mazu and Q1.

3. Storage meets security -- again. Here's another synergy. Security log files eat tons of storage today and they will only grow in the future. EMC is going from selling storage boxes to selling high volume data solutions.

There are about 18 vendors in the SEM market. Some will get bought by others and some will remain niche players. ArcSight has a good product and wants to go public but this seems like a long shot to me. Security is rapidly transforming from technology to solution and you have to have deep pockets, worldwide sales, field support, and enterprise relationships to play. Small fry need not apply.