WatchGuard Moves Into Authentication Market With Datablink Acquisition

WatchGuard Technologies is continuing to add to its security platform for SMBs, announcing on Tuesday that it had acquired Datablink to boost its authentication capabilities.

WatchGuard said the acquisition has already closed.

The acquisition continues WatchGuard's push to expand its portfolio beyond the network and wireless security space. In an interview with CRN, CEO Prakash Panjwani said Datablink breaks WatchGuard into the authentication space, an area he said is just as important to SMBs and distributed enterprises but has been so far out of reach due to cost and complexity.

[Related: Q&A: WatchGuard CEO On Two-Year Anniversary, SMB Security Opportunity, And UTM Competition]

"Most of the SMBs have survived on user name and passwords for authentication," Panjwani said. "With the breaches increasing every day, the No. 1 thing you hear about is just passwords getting stolen. Having a stronger authentication system that includes multi-factor authentication elements is critical." 

Panjwani said WatchGuard chose Datablink because the company's products fit its two primary criteria for acquisition: a channel-ready product that is assessable for SMBs and distributed enterprises. He said Datablink's cloud-based software offering for authentication is a good fit for both of those criteria.

WatchGuard said it plans to roll out the product as a cloud-based service through its partners. WatchGuard sells 100 percent through the channel. Panjwani said he expects the product will be available to partners through WatchGuard in the first half of next year. He said current Datablink partners can still buy the product in the interim.

For partners, Panjwani said the new technology will fit into the existing WatchGuard partner program, with strong margins and tying into the other services offered on top of the company's security platform. He said it presents an opportunity for partners to layer additional subscriptions on top of existing customer implementations.

"This will be yet another service they can layer on," Panjwani said. "It allows them to have yet another engagement or discussion point to offer additional services top of that. It is a good opportunity for the future."

Panjwani said nearly all Datablink employees will be joining the WatchGuard team, starting today. He said that includes 70 employees, who mainly work in engineering and manufacturing.

The acquisition comes shortly after Panjwani said in an interview with CRN that WatchGuard would expand its portfolio through investments and acquisitions. Panjwani said at the time that WatchGuard would look for offerings that bring enterprise security to SMB customers and are also channel-ready or could be made channel-ready. He then noted the following technology areas the company would look at include CASB, access control including single sign-on and two-factor authentication, and additional layers of defense for the company's web application firewall.

Acquisitions have already been part of the WatchGuard portfolio expansion strategy. Last year the company acquired HawkEye G from Hexis Cyber Solutions to add new threat detection and response capabilities to its platform.

Kevin Willette, partner, president and CEO of Verus, a Coon Rapids, Minn.-based WatchGuard Platinum partner, praised WatchGuard's strategy to expand its portfolio both organically and through acquisition. He said Panjwani, in particular, has played a critical role in driving that strategy for the company since he came on board a little more than two years ago.

Willette said it is particularly beneficial to have WatchGuard bundle different security components into their appliances and add cloud-based offerings. WatchGuard plans to do both of those things with the Datablink acquisition.

"They really take all these enterprise-specific applications that most midmarket companies don't normally have the ability to purchase," Willette said. 

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