RSA buys into the financial

RSA Security is frozen in time no more. This week, the company went out and acquired Cyota, an authentication and threat prevention sevice provider for the financial services industry. Cyota has a fat customer base including Capital One, Barclay's, and RBS.

This is a good move. Financial services companies are leading the charge into consumer authentication services. RSA was already a player, but it was competing on the authentication infrastructure which is rapidly becoming a commodity. Cyota gives the company an installed base and some unique value-add services.

The other important aspect of this deal is industry focus. As strong as RSA is technically, it has been losing market momentum and margin with its horizontal focus. Can RSA really compete with IBM, Sun, and CA on Identity and Access Management? Doesn't look like it. RSA can now focus on a particular leading industry and up-sell over time. This is a much better way to proceed in the identity market which is both important and slow moving.

One other note, RSA also buried a re-org anouncement on the same day as the Cyota acquisition. It's certainly no fun to talk about firing workers and moving jobs but RSA is doing what it has to do to compete.

Wall Street remains bearish and RSA needs to do a lot more moving forward but at least it is off the dime.