Yesterday, Proofpoint announced it will acquire social risk and compliance (SRC) vendor Nexgate for approximately $35 million.
The Acquisition Signals The SRC Market Is Maturing
This acquisition points to a budding and rapidly evolving SRC market. With the proliferation of social media, organizations face a slew of emerging regulatory challenges, brand threats, and security vulnerabilities – just look at recent incidents with Cole Haan, Zarbee’s, US Airways, British Gas, among countless others, even including our own US military. While once a niche market helping financial services firms meet FINRA obligations, SRC solutions now offer more than just compliance support, helping organizations better manage today’s wide gamut of social risks with social threat detection, account protection, and risk monitoring.
Proofpoint Has To Prove The Sum Is Greater Than Its Parts
Founded in 2011, Nexgate has emerged as a major competitor in the SRC solutions market, and is a solid acquisition for Proofpoint given each vendor’s focus on social media, security, and compliance.
Proofpoint, a SaaS information archiving and security vendor itself, has been committed to social compliance (and now social risk too), developing its own archiving capabilities for social media and continuing to expand its social capture sources (e.g., its integration with Salesforce Chatter and certification as a LinkedIn Compliance Partner). Acquiring Nexgate will significantly enhance Proofpoint’s social risk and security capabilities while complementing its existing information archiving offerings.
Yet, while there’s an a initial fit for the two companies with complementing SRC capabilities, success is far from certain. Since Proofpoint’s IPO in 2012, it has made four different acquisitions: Armorize Technologies, Sendmail, NetCitadel, and now Nexgate. How all of these point solutions fit into its broader strategic vision remains unclear, and will require painstaking efforts to integrate and develop a unified sales and marketing strategy. In particular, Proofpoint’s long-term success depends on how well it leverages and integrates Nexgate’s current technologies, and how it will invest in continued innovation in SRC, particularly in its social risk monitoring and brand protection capabilities.
See our Quick Take: Proofpoint Acquires Nexgate report for a more detailed analysis on the implications of this acquisition, the trajectory of the SRC market, and what it all means for risk, compliance, and even marketing professionals today and going forward.
The SRC Market Isn’t Going To Slow Down
Expect even more entrants, a continued bifurcation between social publishing and SRC vendors, and countless more social risk events to take place throughout 2015, and beyond.
As always, I’m curious what you think about all of this, so post your thoughts in the comments section below, and be sure to follow me on Twitter (@nickhayes10).