On Diverging Convergence

Networking giant Cisco's acquisition marks a step toward the convergence of the networking and Internet security markets, which Cisco signaled a year ago in unveiling its Cisco Enterprise Security Alliance.

McAfee's merger late last year with Network General to form Network Associates (NETA) was driven by the same convergence impetus, as was last year's move into the bandwidth-management space by top firewall vendor Check Point (CHKPF).

So, convergence is a hot topic once again. IBM buys ISS and the stories abound. I copied a paragraph from a story above that talks about convergence... can anyone guess where it came from? A quick Google should pop up this article from CNET dated February 19, 1998, two years before the height of the bubble. Eight and a half years ago. Either this convergence thing is taking a mighty long time or it is a normal market occurrence.

Companies buy other companies. It is self-evident that this is "convergence" of a sort, but also pretty simplistic when attempting to understand the implications. Nowadays, it is common to think of all of security as a "market" when in reality it is dozens of markets. We completely ignore Geoffrey Moore's definition of a market:

• a set of actual or potential customers
• for a given set of products and services
• who have a common set of needs or wants, and
• who reference each other when making a buying decision.
• (reference: Crossing the Chasm, page 28 paperback edition)

Anyway, it is common to think of the "security market" as some sort of static entity that only generates a set amount of spending when in reality it is a growing, changing, dynamic set of revenue and spending.

It is too easy to say "the market is converging" and provide plenty of evidence. It is too easy to say "the market isn't converging" and provide plenty of evidence. Herewith are some definitions of convergence that may be useful in assisting those who actually care whether the market is converging or not:

• One company buys another company. Convergence.
• There are fewer companies in the "market" today than there were yesterday. Convergence.
• The top 5 companies in any space account for 95% of the revenue. Status quo.
• Fewer companies are accounting for a larger portion of market share. Convergence AND status quo. (Remember I suggested that convergence is a standard part of the market?)

I like the last one because it takes into account market growth as well as new vendors. Btw, it is not clear to me that IBM buying ISS could be considered "convergence" simply because I don't think IBM was in ISS' "markets" and therefore the market share numbers should remain the same (it is a one-for-one swap).