Two-Factor Authentication (2FA) Companies Continue to be Attractive Acquisition Targets
Last week, Courion announced its acquisition of Nova Scotia-based SecureReset, which, through its QuickFactor product, provides mobile-based two-factor authentication (2FA). This is the fourth acquisition of a 2FA startup by an enterprise software vendor in 2015:
· Twilio acquired Authy, February 2015 (purchase price N/A).
· Salesforce acquired Toopher, April 2015 (purchase price N/A).
· Micro Focus acquired Authasas, July 2015 (purchase price N/A).
· Courion acquired SecureReset, November 2015 (purchase price N/A).
These acquisitions reflect ongoing enterprise demand for 2FA solutions as an alternative to passwords. By now, the problems with passwords are well-known: They are easy for hackers to steal in bulk, and ongoing advances in computing processing power have eroded password security.
Since a password-free world is still somewhere off in the future, two-factor authentication provides a compelling password alternative that can help mitigate security risks. The evolution toward software-based 2FA form factors running on smartphones instead of dedicated single-purpose hardware tokens has eased deployment and training costs; it has also enabled large-scale consumer deployments of two-factor authentication as a password replacement alternative. These 2015 acquisitions demonstrate the continued interest in two-factor authentication.
The 2FA vendor ecosystem is still large and diverse, comprising everything from small startups to the large IAM suite vendors. This diversity and competition helps fuel innovation and the continued demand for password alternatives means that further acquisitions of authentication vendors will likely continue in 2016 and beyond.