Get your motor running

RSA's acquisition of PassMark security is interesting because of what it means for RSA and what it means for the identity industry as well.

The big news in identity today is that RSA has acquired PassMark security for $44.7 million in cash and stock. I first learned about PassMark when Louis Gasparini (who was then the SVP of Internet Transactions at Wells Fargo) let me know he was joining a startup. I'd gotten to know Louie through his consistent attendance at the Digital ID World conferences, so I was pretty interested that he'd be leaving Wells for startup land.

Since that point in time, PassMark security made a name for itself by signing up Bank of America as the premier user of their two-factor authentication technology. And I suspect that it was this key win, which everyone in the identity world took notice of in light of the FFIEC guidance, that brought PassMark to the point of being a target in the acquisition game.

The acquisition is particularly interesting for RSA, as it now pretty clearly signals RSA's strategic direction: covering the broad spectrum of authentication solutions. Moving beyond the traditional SecureID token, RSA is now clearly aiming to take what it perceives as the big market of consumer-facing authentication. And, as it stands right now, you'd have to say they're in a good position to do so.

Not that the field isn't crowded, or getting more crowded everyday. The OATH initiative that Verisign is working on is one notable entrant, as are the smart card and biometric vendors. What RSA has going for it though is an installed base of customers, and the ability to integrate authentication into their ClearTrust identity management suite. As both Phil and I have noted in the frenzy of last year's identity acquisitions, the ability to natively provide strong authentication is still something that most of the "big boys" can't do.

In the larger spectrum of things, an acquisition like this is interesting because it betrays where we stand in the growth of the identity industry. There were some parties last year that saw all of the acquisitions as an indication that the "hot-ness" of identity management had peaked. That's not the case at all. This acquisition shows that the "acquisition cycle" is still in its early days. The reason for that is simple: the identity industry is still growing and expanding (through startups and established companies) at a massive rate.

The digital identity industry is just getting started. As we build out the infrastructure to support identity both inside and outside of the corporation, we'll put in place the necessary pieces to do the really interesting things -- build identity applications.

Strap on your seat-belt. This one just turned on the engine.