Sumo Logic is acquiring DFLabs. The deal will empower MSSPs and MSPs with more security automation capabilities by combining Sumo Logic’s cloud-native SIEM (security information and event management) platform with DFLabs' SOAR (security orchestration, automation and response) software. Financial terms of the deal were not disclosed.
This is M&A deal number 170 that MSSP Alert and sister site ChannelE2E have covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.
The Sumo Logic-DFLabs deal is expected to close around mid-2021. At that time, DFLabs CEO Dario Forte and the DFLabs team will join Sumo Logic’s Security Business Unit. The resulting Sumo Logic SOAR solution will allow the "linkage of upstream emerging DevSecOps models with the downstream SOC workflows, closing the loop for adaptive cloud scale defense," the buyer says.
Ahead of the deal, customers already as much as a 10x improvement in SecOps productivity when implementing DFLabs' IncMan SOAR platform, the seller says.
Sumo Logic Acquires DFLabs: MSSP and MDR Security Partner Details
Both Sumo Logic and DFLabs design their software for MSSPs (managed security service providers), MDRs (managed detection and response service providers) and MSP partners.
DFLabs began to more aggressively support MSSPs and MDR partners in 2019. From that point forward, the SOAR platform allowed MSSPs and MDRs to "simultaneously manage security operations across multiple customer environments, regardless of the security products deployed at each customer site," the company said at the time. Early partners include CyberGate, an MSSP in the Middle East.
Meanwhile, Sumo Logic has a growing base of MSSP partners. The company's cloud-native SIEM was built as a multi-tenant system for managed security services providers from the start, Sumo Logic Co-Founder and CTO Christian Beedgen told MSSP Alert in 2020.
Sumo Logic: Growing MSP Partner Momentum
Together, Sumo Logic and DFLabs will continue that partner focus. According to the buyer: "The acquisition will broaden Sumo Logic’s portfolio as well as a rich joint ecosystem of customers and partners including MSPs, MDRs and VARs, while accelerating the companies’ mutual strategy to deliver the automation needed to modernize the SOC."
During Sumo Logic's earnings call on March 10, CEO Ramin Sayar further described the company's overall partner effort. He stated:
"In addition to the investments we are making in our platform we continue to invest in our go-to-market functions. This year we plan to expand our reach through increased direct sales and growing our ecosystem of partners including ISVs, distributors, resellers MSPs and MSSPs. We intend to enter and grow into new markets like federal and expand our international presence with distribution partners and we expect to leverage our expanded partnership with AWS which includes enhanced go-to market and strategic collaboration programs across deal registration, marketplace, target verticals and other geographies."
Sumo Logic now has more than 400 MSP partners, and the company's MSP channel more than doubled year-over-year in 2020 vs. 2019, Sayar said.
Sumo Logic: SIEM and SOAR Next Moves
In a prepared statement about the DFLab deal, Greg Martin, VP and general manager of Sumo Logic Security Business Unit:
“Security in the modern world is moving from a human-scale problem to a machine-scale problem. Customers are looking for a new approach to help them overcome the pain and complexity around an increasingly perimeter-less world. The DFLabs team are experts in helping customers navigate this new world. By aligning our cyber security expertise, customer validated and leading security portfolios, we believe we will be able to address the critical challenges our customers face as they navigate this changing threat landscape.”
Added Dario Forte, CEO of DFLabs:
“The team at DFLabs deeply understands the challenges facing the modern security practitioner, and we’ve purpose built our SOAR to help them dramatically improve their productivity. Joining Sumo Logic will be an exciting next step for all of us, as the value we believe we can provide together is very clearly understood. Best in class security operations solutions require broad functionality and deep integration to effectively address the modern threat environment, and when combined, the expanded Sumo Logic Cloud SIEM will provide best in class analytics and automation out of the box.”
The deal is subject to customary closing conditions, including certain government approvals in Italy -- where DFLabs is based.
SOAR: Hot Security Market
The overall SOAR market remains in rapid growth mode. Indeed, SOAR-related revenues are expected to reach $1.82 billion by 2025, a 15 percent compound annual growth rate from 2018, according to Adroit Market Research.
With an eye toward that market opportunity, multiple security companies are making SOAR-related business moves. For instance:
- March 2021: Capital One invested $24 million in Securonix, which grew its annual recurring revenue 55 percent in 2020 vs. 2019. Secureonix did not disclose actual revenue or profit dollar figures.
- March 2021: Blokworx, a Top 250 MSSP and master MSSP, has integrated the WitFoo Precinct security operations platform into its offerings.
- February 2021: Robert Herjavec, CEO of Herjavec Group, said he would focus the MSSP on SOAR capabilities. Herjavec made the statement in this MSSP Alert video interview.
- January 2021: Swimlane, a SOAR provider, raised $40 million in funding.
- January 2021: Fortinet explained the SOAR partner opportunity in this MSSP Alert video interview.
- September 2020:SOAR software provider ThreatConnect acquired Nehemiah Security, which specializes in Cyber Risk Quantification solutions.
- August 2020: Palo Alto Networks launched the Cortex XSOAR marketplace.
- February 2019: Palo Alto Networks acquired SOAR startup Demisto.
Also of note: Both Google Chronicle and Microsoft Azure Sentinel could also have cloud SIEM and SOAR implications for MSPs and MSSPs.
Sumo Logic: Cloud SIEM Growth
Meanwhile, Sumo Logic's cloud-native SIEM platform remains in growth mode. For its Q4 of fiscal 2021, revenue was $54.2 million -- up 22 percent compared to Q4 in fiscal 2020, the company said on March 10, 2021.
And for the first quarter of fiscal 2022, Sumo Logic expects total revenue of between $53.2 million and $54.2 million, representing 13% to 15% growth year over year, the company added.
