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SecureWorks Growth: Win for Atlanta Tech/CRE

03/11/2011

Atlanta, GA (Atlanta Business Chronicle) -- Dell’s investment in SecureWorks, a month after buying the Atlanta Internet security company, will be watched warily by Big Blue.

IBM Corp., which bolstered its managed network security creds with its $1.6 billion takeover of Atlanta’s Internet Security Systems Inc., will now have to battle Dell in the white-hot sector.

And Dell means business. As first reported in Atlanta Business Chronicle, the Round Rock, Texas company plans to add about 200 jobs at SecureWorks.

That job number could eventually rise to 300 — and the majority of hires would be in Atlanta, a source familiar with the plans told me after the print edition went to press.

SecureWorks monitors corporate networks and helps protect against online attacks from crooks looking to steal financial and other information. As Dell transforms from a hardware/software company to a more integrated services provider, SecureWorks offers the tech giant access to the managed security business.

Atlanta is the headquarters of Dell’s managed network security service business, said Rex Tibbens, executive director of Dell’s Global Services unit.

The executive didn’t rule out the prospect of bringing non-Internet security related work to Atlanta. The region could be an attractive site for further engineering and development work, not only around security, but also IT services, Tibbens said.

Win for Atlanta tech and real estate

In its latest expansion, SecureWorks is hiring, among others, security researchers, engineers and salespeople. To accommodate the additional workforce, SecureWorks plans to double its roughly 75,000 square feet of office space at 1 Concourse Parkway in the Perimeter area. The expanded facility will offer other Dell employees in the area, such as account executives, client meeting spaces.

SecureWorks will likely put the additional space in a nearby building, since its current building is said to be 99 percent leased.

Filling 75,000 square feet — typically two to three floors — is a significant requirement in the current office market, according to a broker who specializes in office buildings.

“Central Perimeter, over the last few years, has taken its licks,” the broker said. “But with the demand coming back, it’s probably going to be one of the markets that recovers the quickest because of GA 400 and MARTA.”

SecureWorks will raise Atlanta’s profile in Round Rock, said Stephen Fleming, a former investor and board member in the company.

“Senior [Dell] management is going to visit Atlanta more often, they’re going to see how successful SecureWorks [is], they’re going to see the research [being] done at schools around here,” Fleming said. “And, they’re going to say, ‘Wow, when it’s time to build our XYZ center, Atlanta ought to make the short list.’ ”

Cybersecurity is big business

As Corporate America migrates online, protecting sensitive data is getting more complicated. Corporations are in a cat-and-mouse game with determined criminals looking to crack their databases and swipe passwords, Social Security numbers and trade secrets. SecureWorks processes more than 13 billion security events and sees more than 30,000 malware specimens daily.

“The hackers are continuing to grow,” SecureWorks CEO Michael Cote said.

Corporate America’s migration toward cloud computing is driving demand for managed security services, Tibbens said.

“It’s becoming more and more important for customers to protect their customers and their employees from the bad guys on the Internet,” he said. “That’s the sweet spot of SecureWorks.”

SecureWorks’ growth strategy hinges on launching new products and services, and broadening its footprint overseas. The company plans to invest heavily in Latin America and Asia-Pacific in the next several years.

SecureWorks will execute on that growth strategy through acquisitions and organic growth, Cote said.

Internet security is among the faster-growing services sectors — global revenue for security services is growing at a roughly 15 percent annual clip, Gartner Research Vice President John Pescatore said.

Instead of managing and monitoring Internet security with in-house staff, businesses are outsourcing it to third-party providers, such as SecureWorks.

For Dell, Atlanta could offer more takeover opportunities, said Alan Taetle, partner at Noro-Moseley Partners, a former SecureWorks investor.

Dell seems to be “keenly aware of moving into more software-as-a-service-oriented B2B businesses,” Taetle said. “We’re a B2B software town.”

Like with many acquisitions, SecureWorks runs the risk of getting lost in a larger organization, Pescatore said, noting Dell, so far, has allowed SecureWorks to stay focused.

“When a general IT infrastructure company buys a security specialist company, it can always dilute it,” Pescatore said. “Will [SecureWorks] be forced to be wider and shallower, versus being very deep in security?”