Secure Islands’ software automatically classifies, controls access to, and encrypts unstructured data. They are a competitor of Varonis.
Microsoft acquired SI today, and this is a good thing for Varonis.
Our recent 3-part series concluded that the most important thing for VRNS longs would be how quickly the company could simplify and scale what has been a difficult, evangelical sales process.
In acquiring Secure Islands, Microsoft validates unstructured-data security.
“This acquisition accelerates our ability to help customers secure their business data no matter where it is stored – across on-premises systems, Microsoft cloud services like Azure and Office 365, third-party services, and any Windows, iOS or Android device.”
Yes, Varonis now has Microsoft as a competitor. But as the leader in the unstructured data security space, Varonis will win their share.
Equally as important, if Microsoft’s competitors, who are the biggest names in IT, want to match this move, there just aren’t that many unstructured-data security properties available.
M&A comparables for technology acquisitions in the security space cluster near ~ 10x sales. Pulling out their cash, Varonis trades at only 3x sales. This is intriguing.
Most importantly, Microsoft just reinforced and validated the Varonis value proposition to global CISOs. Softie gets it. Companies need to secure unstructured data everywhere it resides.
This growing momentum is likely going to benefit Varonis in terms of making their sales cycle less evangelical and more scalable, and any sales growth acceleration is going to drive up the stock in a big way.
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