Data security is suddenly a sexy topic again. Last fall, it was because of a wave of consolidation sweeping across the security software sector. This time, the attention-getter is far more ominous: A bushel of large companies have seen their systems hacked or attacked recently.
Will this trigger a second round of juicy buyouts?
The story so far
In other news, Google reported break-ins into its Gmail service. This became a minor international incident as Big G pointed fingers at China, following the larger spat in 2010 that sent some Google servers over to Hong Kong.
And then there's repeat offender (or is that "repeat victim"?) Sony. In a series of attacks against the consumer-electronics veteran, hackers have obtained the personal information of 77 million Sony users, including at least 12,700 credit card numbers. The company estimates an operating cost of about $170 million to handle that massive breach alone, not accounting for smaller attacks in its wake or the damages as the inevitable lawsuits start flowing in.
In short: ouch. Cyber-security -- or the apparent lack thereof -- is a big, painful pimple on today's business world.
What's bad for the goose is good for the gander
But one man's disaster is another's opportunity. Much of Sony's $170 million cleanup bill goes toward beefing up the company's security systems, which is great news for security vendors.
But that's just the beginning. I fully expect another round of industry consolidation here, because enterprise security is suddenly a big deal again -- and a very fragmented industry to boot.
Recently acquired McAfee and standalone titan Symantec
Where are the targets?
To my mind, the most likely buyout targets at a time like this would be small to midsized security specialists with full-featured solutions for the enterprise. The big boys are running scared now that they've seen fellow giants Lockheed and Google taken to the cleaners, and the attackers may have been emboldened by these successes, too. Anything's a fair target.
With that in mind, I'd peg Check Point Software Technologies
On a smaller scale, Blue Coat Systems
The IT industry is transforming itself as we speak. Old business models are headed to the trash heap as the hyperconnected new business world emerges. Whatever buyouts might happen in this environment will surely lean heavily on the targets' expertise in cloud security. Watch a free video that explains cloud computing in portfolio-changing detail.
Fool contributor Anders Bylund owns shares of Google, but he holds no other position in any company mentioned. See his holdings and a short bio. The Motley Fool owns shares of Google, Oracle, EMC, and Lockheed Martin. Motley Fool newsletter services have recommended buying shares of Check Point Software Technologies and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.