One Identity was already using Balabit’s Privileged Session Management capability in their PAM solution, but the acquisition assists them further on several technology fronts. Balabit’s significant channel is also seen as critical to One Identity’s own channel growth.

One Identity, one of the business units within Quest Software, has announced their first acquisition since Quest was spun back out of Dell EMC in the fall of 2016. They have acquired Balabit, a Hungarian-based maker of session management solutions that play a key role in Privileged Account Management [PAM]. Terms of the deal were not disclosed.

For One Identity, the deal is significant on a couple of level. They were already OEMing Balabit’s core solution, and this will give them additional control over that technology. However, Balabit has additional related technologies which can now be incorporated as well. The go-to-market impact will also be significant, as Balabit brings a significant channel with them, which will greatly enhance One Identity’s efforts to build up their indirect PAM business.

“We’ve been working with Balabit for the last couple years around their Privileged Session Management technology, which we have incorporated in our Safeguard Privileged Account Management solution,” said Jackson Shaw, VP of Product Management at One Identity. “We really liked the direction that they’ve been taking the company, as we looked closely at their road map. They are also very big from a partner channel perspective, and that is an area that we want to grow in as we mature our company.”

Balabit’s focus has been on session management recording. Their technology controls privileged access to remote IT systems, records activities in searchable, movie-like audit trails, and prevents malicious actions. It also captures the activity data needed  for user profiling and enables full user-session drill down for forensic investigations.

“Session management is one half of the Privileged Account Management story, with the other half being how you safeguard the passwords,” Shaw said. “A couple of years ago, when we rebuilt our appliance, we had the choice between building our own session management capability or OEMing it. At that time, Balabit sold a session management solution only, and they had a great reputation, so we began to work with them.”

Acquiring Balabit gives One Identity more control over the direction of the direction of the session management technology, but it is not the only technology asset they gain in the deal.

“They have developed great businesses around both log management, and around analytics and machine learning,” Shaw indicated. “Both of these areas are things we wanted to expand into, and we are getting additional intellect and horsepower around both.”

syslog-ng, the log management solution, collects and centralizes the log data critical to be managed for tracking, performance metrics and network traffic solutions. The Privileged Account Analytics capability integrates data from Balabit’s Privileged Session Management solution, as well as other contextual data, and processes them with machine learning to detect suspicious activity by identifying unusual and risky deviations to baseline activity. It can then respond with countermeasures from risk-based alerts to automated session termination.

“Balabit was planning to incorporate analytics into their Privileged Session Management product, and that would also leverage their log management product,” Shaw said. “We thought they were going down the right path and we will continue with that.”

As far as the full integration of Balabit technology into One Identity, Shaw indicated that it’s still early days.

“We just started those discussions today, about how much faster we can fully integrate the session management technology,” he said. “By April, we will have a more definitive roadmap.”

Balabit is best known in Europe, where they are based, but they have a North American business as well.

“Their biggest presence is in Europe, but about a year ago, they started building out an American organization, and they have around 15 people here,” Shaw said. “In Europe, they have about 200 people in total.

They also have a significant channel, and their channel business is a much larger component of their business than it is in One Identity’s PAM business. That’s because PAM began among larger enterprises, and the sector as a whole was overwhelmingly direct. One Identity has tried to broaden out the Safeguard channel, but almost three-quarters of the business remains direct.

“Balabit’s European business is between 80 and 90 per cent channel,” Shaw noted.  They prefer to sell through partners unless the customer insists on a direct sale.

Balabit has over 100 channel partners, who service over 50 countries. In Canada, they have two partners, Ottawa based KTL Group, and the Toronto–based BENNELL Consulting Group. Both are Balabit Silver partners.

“Balabit’s channel will massively change our channel numbers,” Shaw said.

In addition to Balabit technology assisting One Identity’s channel, Shaw emphasized that Balabit’s larger channel would benefit significantly as well.

“Balabit partners haven’t had a full PAM solution to sell,” he said. “They have had a session management solution that lacked a privileged vault. My hope and desire is that this is something they are interested in.”

Shaw also stressed that One Identity is well-aware of the challenges when a company with a channel model and a large number of partners is acquired by a larger company with a hybrid go-to-market model. Quest joined Dell around the same time as SonicWALL, whose channel of thousands of partners encountered a few bumps in the road with the Dell integration – more than a few, actually.

“We want to start by reassuring all the Balabit partners that it is business as usual,” Shaw said. “We aren’t going to upset the applecart. We have two goals with their channel. The first is not to disrupt them. The second is to be able to provide them with a full-featured product, a complete PAM solution that will provide them with additional value. We see their channel as playing a key role in helping us to get to that next level in channel sales.”