Trend Micro buys Third Brigade, gains Canadian presence

Trend Micro Inc. will look to ramp up its virtualization security portfolio — and establish a Canadian presence to boot — as the anti-virus vendor has purchased Ottawa-based security firm Third Brigade Inc.

The Tokyo-based security vendor, which has its U.S. offices in Cupertino, Calif., had been using Third Brigade’s host-based intrusion-prevention software in its flagship OfficeScan product line for several years. Trend Micro CEO Eva Chen said that being able to fully own and control its investment in the firewall technology was a key driver being the deal.

“We see this as a great synergy that can help us with our new dynamic data centre protection strategy,” she told reporters on a conference call Wednesday. “We’re very happy that we can bring the Third Brigade team onto Trend Micro and together deliver on this strategy.”

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Trend Micro confirmed that Third Brigade will be incorporated as Trend Micro Canada Technologies Ltd. and no layoffs are expected.

Along with the intrusion detection and prevention capabilities, Trend Micro will also acquire Web application firewall, application control and reporting and inspection capabilities from the Third Brigade portfolio.

All of this technology will integrate well with Trend Micro’s continued focus on data centre security, including emerging areas such as virtualization and cloud computing, the company said.

“We’ve been having discussions with major virtualization vendors like VMware, Citrix, and Microsoft, and have found that Third Brigade was having very similar conversations with those infrastructure players about how to best secure virtual environments,” said Punit Minocha, vice-president of corporate business development at Trend Micro.

James Quin, senior research analyst with London, Ont.-based Info-Tech Research Group Ltd., said that the most valuable aspect of the acquisition could be Third Brigade’s heightened security management capabilities for virtual environments. This technology is available in the company’s Deep Security 6 server and application protection software.

“Just on the surface, providing enhanced protection to the virtual layer is something that’s going to become increasingly important and valuable to a lot of enterprises, because quite simply, virtualization is here to stay,” he said.

Quin said the acquisition can be compared to Symantec Corp.’s 2007 purchase of data leak prevention firm Vontu. Those two companies had a long-term partnership agreement, giving Symantec the opportunity to “try before they buy,” he added.

“This is what we’re seeing in the security market as consolidation is absolutely rampant,” Quin said.

“Now is a good time to be expanding your footprint as smaller companies are impacted by the financial uncertainties that are occurring out there.”

He added that the acquisition is a worthwhile investment for Trend Micro because it could elevate them from being a “very good anti-virus company” into a “very good security company.”

In addition to bolstering its portfolio, Trend Micro hopes to increase its presence in what it considers an under-tapped market. As part of the agreement, which is expected to close later this quarter for an undisclosed sum, Third Brigade’s Ottawa offices will become the new headquarters for Trend Micro Canada.

Still, the intent is to keep the heart of Third Brigade, and its 50 employees, alive at the new Canadian subsidiary. “From a people perspective, our entire development team will stay in Ottawa servicing the broader vision,” said Wael Mohamed, president and CEO at Third Brigade.

“It’s a great success story for Ottawa to bring a large company like Trend Micro to Canada. And they have great plans in the future to look at Canada as a strategic area to leverage on the success we have already gained here.”

Minocha added that Ottawa’s talent pool was also a key factor in the deal.

“In the past, we’ve seen that Ottawa has had some very successful security companies,” he said. “This becomes a very good location for us to tap into experienced security developers.”

As for whether the opportunity for Trend Micro to develop a Canada base played a role in the agreement, Quin expressed some skepticism.

“It maybe serves as notice that they consider the Canadian market to be worthwhile and valuable to them, but it does tend to be a fairly small market,” he said. “This is probably more of a decision in acquiring Third Brigade and the technology that they have, as opposed to establishing a Canadian office.”

“If Third Brigade had been located elsewhere, I don’t think there would have been any kind of push whatsoever to establish a Canadian office.”

David Senf, director of research for Canadian security and infrastructure software at Toronto’s IDC Canada Ltd., said that like many Canadian IT vendors, Third Brigade found their market was more focused in the U.S.

“It is critical that as a nation we continue to invest in the IT sector, in growth markets such as security,” he said. “For Third Brigade, they stayed focused on a niche, but hot area of security, and it paid off.”

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