There was a relatively small acquisition on Tuesday: nCipher, a U.K.-based encryption specialist, purchased storage encryption appliance vendor NeoScale Systems. This could be looked at as basic industry consolidation, but the impact could ripple further.
Encryption and, more specifically, key management really needs a set of standards to prosper and grow. Key management standards must include standard ways to connect encrypting devices to key managers, key managers to key managers, and so on. There are a few nascent standards efforts in this area, but nothing concrete.
Here's how this niche merger could impact the stalemate. nCipher has strong relationships with IBM, while NeoScale works closely with EMC-RSA. nCipher also has developed some very simple yet elegant key management communications standards and interfaces. If nCipher-NeoScale can build some consensus on standards with IBM and EMC-RSA, the rest of the industry is bound to follow. This could lead to a pragmatic solution to a vexing problem.
The industry needs leadership here. If we don't fix the key management standards problem, data is bound to get lost or stolen while operating costs increase. If nCipher-NeoScale can help move the industry in the right direction, this seemingly minor merger could have a profound industry impact.