Websense Raises Stakes in Data Security

Websense's(WBSN Quote) $90 million decision to buy information leak-management start-up PortAuthority Technologies Wednesday underscores the growing interest among IT security companies in data management products.

Increased regulatory requirements, rising incidents of data loss and a stronger desire on part of companies to monitor the flow of information through their networks has made data security big business.

Websense has said that the planned acquisition will help it create a product aimed at preventing the unauthorized use or disclosure of confidential data, and extend its ability to protect users and data from external threats such as viruses and spyware.

The all-cash deal is likely to put pressure on other security players such as Symantec(SYMC Quote), CA(CA Quote) and Secure Computing(SCUR Quote) to either buy or build a similar product.

Acquisition is likely the road those companies will take in their effort to shore up investor interest and move into emerging high-growth areas such as data security.

"This is not the last we are going to hear about acquisition or homegrown technologies in this space," says Trent Henry, senior analyst with research firm Burton Group. "Though if they were homegrown, they would be late to the game."

Shares of San Diego-based Websense were up 19 cents to $23.68 in midday trading Thursday.

Though Websense has been up 4.7% in the three months starting Sept. 20, the stock is down more than 26% in the year to date.