A leading cyber security company sought to enhance its product offering via adjacent solutions. In addition, it was interested in reaching into new market categories, specifically tier-one enterprises, and establishing itself as a strategic security solutions and service provider. After analyzing the build-partner-buy options, a decision was made to acquire.
In addition to developing a map of relevant technologies and companies, consideration was given to the value of each solution as well as market penetration. Relevancy, credibility, and technology viability were all mapped along with synergies that could result as a result of any acquisiton.
The TDD yielded several viable targets and a range of technology from emerging with little commercial success to mature and possibly dated but broad deployment. A proposal was developed that would have resulted in the company acquiring several leading emerging technologies, each with limited market penetration. This would have enabled the company to assemble a “best of breed” offering and would have created a very high barrier for any competitor.
Instead, the decision was taken to acquire the least relevant technology from the company with the best market penetration. The synergy of the sales force trumped the value of the technology. Access to tier-one enterprises and an enterprise-oriented sales team were the primary drivers behind the acquistion decision.
Although the customer opted to focus on business drivers, the analysis of the target-company technology along with a review of alternatives in the market provided the acquirer with valuable information for product and R&D focus post acquisition. The TDD value was, therefore, on areas of additional product investment that would be required.