Hewlett-Packard recently announced the availability of ArcSight Express 3.0, an upgraded version of the product it acquired last year. In light of this release, we note that independent ESIM vendors aren’t resting on their laurels, either. They continue to develop, innovate and position themselves as potential IPO/acquisition candidates. Competition is already fierce among ESIM players, with each trying to expand their addressable markets, but with HP, Attachmate and Sophos adding ESIM offerings to their portfolios, rivals might look to add to their own to compete effectively.
In a recent report, my colleague Andrew Hay notes that there are several potential acquirers and targets. The list of takeout candidates continues to include Q1 Labs, although there have been M&A rumors around the company for a decade. Q1 Labs is also primping itself for an IPO, but we wouldn’t be surprised if it became the latest target in the growing line of dual-track acquisitions announced so far this year. Given its enviable revenue growth (Q1 Labs reported that its revenue grew 75% in 2010), we expect that Q1 Labs would catch a valuation similar to ArcSight. HP picked up that Cupertino, California-based security provider in September 2010 in a deal valued at nearly 8 times trailing sales. Beyond Q1 Labs, we could point to NitroSecurity, which was allegedly in talks with McAfee earlier this year. We’d also note that McAfee lost out on the ArcSight assets, and could look to NitroSecurity as an alternative.