LastPass bought by LogMeIn for $110 million

The merger of the two password management firms has sparked an outcry from LastPass users, some of whom say they refuse to do business with LogMeIn.

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Remote access software maker LogMeIn has acquired the password management software startup LastPass for $110 million.

In addition, another $15 million in cash is available in contingent payments if LastPass meets certain milestone and retention targets over the two-year period following the closing of the acquisition, which would bring the total price tag to $125 million.

LastPass, which is technically incorporated as Marvasol Inc., makes a popular remote access product and competes with the likes of Dashlane, 1Password, KeePass and Password Safe.

LastPass allows users to store encrypted versions of their passwords in the cloud and unlock them with a single password via secure browser plugins or a web interface. The company also offers apps for Android and iOS, along with an enterprise platform for storing passwords for servers and SaaS applications.

Once the deal is complete, LogMeIn plans to integrate into LastPass certain capabilities from Meldium, a Y Combinator-back identity management startup which it acquired last year.

LogMeIn says in the near-term, both the Meldium and LastPass product lines will continue to be supported and operated as standalone products, but in the long term it looks like the goal is to offer a singular identity management offering based on the LastPass service and brand.

Of course, not all tech acquisitions make for happy customers. While seemingly innocuous, the deal has sparked an outcry from LastPass customers, some of whom say they refuse to do business with LogMeIn.

On a LastPass blog post discussing the acquisition, user comments are nothing short of brutal.

"Worst news ever," wrote one user identifying as Jamie Curle. "You built something wonderful and sold it to a bunch of profiteering idiots. This makes me very, very, very uncomfortable the data that logmein [sic] will now hold."

"Are you CRAZY?!?," another commenter wrote anonymously. "This news has just ruined my day. Now I'm going to have to spend this weekend moving to an other password manager. LogMeIn is probably one of the most unethical software companies in existence. Seriously, this is just one step above selling to the NSA. What contempt for your user base."

Ouch. So much for those retention targets.

The overwhelming criticism seems to revolve around a few key concerns regarding LogMeIn's business. For one, LastPass won the hearts of its users because it was a pure security company, and the fear now is that LogMeIn will turn LastPass into a feature rather than a remote access product, which adds the possibility that security will become a secondary focus.

What's more, LogMeIn has a reputation for hiking prices on its core product, causing some users to jump ship as costs to use the service escalated.

ZDNet has reached out to LastPass regarding the criticism from its users and will update this story with any statements.

Update: The following statement is from Bill Wagner, LogMeIn president and COO:

We're very excited about the acquisition. LastPass is a great company with a beloved product, loyal customers and a strong team. Obviously whenever there is an acquisition like this people are understandably nervous that it will change the product and customer experience they've come to love. However, while CEO Joe Siegrist and the LastPass team are joining LogMeIn they will continue to lead the strategy and development of the product. We also really admire their business model and have no plans to change it.

I think people might be upset because they used to use a free version of LogMeIn that we discontinued several years ago. I get that. But those circumstances were very different--it was free for ten years but ultimately became a very mature product in a small market. LastPass is actually a lot more similar to our join.me product: Both are great, simple to use products serving large, growing markets. Both have the highest customer satisfaction of any of the products in their respective space. Both have free products that we expect will be around for a long time to come.