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What cybersecurity means to the Dell-EMC mega-deal

OCTOBER 17, 2015, 1:23 PM EDT
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Will Dell and EMC’s disparate set of computer security segments all hang together?

So how about that Dell-EMC deal?

The pending $67 billion takeover, which could be one of the largest tech deals of all time, has received no shortage of press attention. (Fortune included.) Now let’s dive into a particular aspect of these companies that has, to an extent, been overlooked: the cybersecurity angle.

I caught up with John McClurg, vice president and chief security officer at Dell, by phone earlier this week. He admitted that his peers have told him they haven’t classically thought of Dell as a security business. His goal? To change that perception.

“Michael [Dell, the company’s founder and CEO,] came out of retirement some years ago to transform his firstborn,” McClurg said, referring to Dell (the company). “What a lot of my peers don’t know is that in that process, Michael woke up one night and had an epiphany.”

The epiphany, as McClurg described it, was that Dell not only had to transform the company from a traditional computer seller into an IT services company, but that security would play a key role in that metamorphosis. The two are “inextricably enmeshed,” as McClurg said. Without one, you cannot have the other.

McClurg, who served with the FBI before joining Lucent ALU -0.79% , then Honeywell HON -1.49% , and now Dell, said he spends about half of his time (“at the request of Michael”) meeting with small-to-medium sized businesses and customers. Many of them express surprise that they might be considered attractive targets for cybercrime, he said. That’s when he delivers the bad news.

“To the extent anyone thought they could obscure themselves—achieving security by obscurity,” as he put it to me, “that aspiration is quixotic at best and delusional at worst.”

In the threat environment of today, he said, it doesn’t matter whether you’re a massive Fortune 500 company or a small mom and pop shop. All organizations—especially ones that don’t invest adequately in security—are appealing and potentially lucrative targets for electronic theft. Besides, in the networked world, hacking a smaller fish can always help one hack a bigger fish.

McClurg wouldn’t share too many specifics about Dell’s plans for its computer security business. He declined to comment about rumors that the company might spin off SecureWorks, its information security subsidiary, in an IPO that reportedly values the division at $1 billion plus. And he didn’t have anything to add on the subject of EMC-owned EMC -0.07% RSA, its encryption and network security firm, per its pending inclusion into the Dell family—at least nothing beyond the casual remark that it will be a “differentiator” for Dell, which is what the company’s execs said on a Monday call.

Both EMC and Dell have computer security businesses. Dell bought SecureWorks in 2011. Among other acquisitions, the company also picked up Sonic Wall for its firewall (2012), KACE for IT management (2010), and Quest for its digital ID management (2012). EMC has owned RSA since 2006. Will the disparate set of cybersecurity segments all hang together? Dell is certainly banking on it.

“Security used to be thought of as guns, gates, guards—and we put geeks in there, too,” McClurg said. “Now, it is an enabler.”

“At the end of the day,” he added, “it’s what enables your program to sell at all.”

http://fortune.com/2015/10/17/dell-emc-cybersecurity/

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