EMC bags hot startup Silver Tail Systems

Gives RSA division sophisticated web fraud detection

EMC announced this week that it has purchased hot online security startup Silver Tail Systems. It will place it in the RSA division.

At its core, Silver Tail is a behavioral analysis engine, which looks at massive amounts of data on the web and across mobile traffic, and looks for security anomalies that could indicate that some sort of fraud is occurring. It also looks for IT security threats, insider threats, business logic abuse and other malicious activity.

Silver Tail's target market has been finance and e-commerce where customers are most concerned about fraud and security. Art Coviello, RSA executive chairman and executive vice president at EMC Corporation, says the speed of transactions requires new types of tools to handle the security threats that face online properties.

"The industry is well beyond the point of providing effective security using static, perimeter point tools that fail to keep up with dynamic cyber attackers. Customers need better intelligence, analytics, and the ability to respond in real time ... " he said in a statement.

EMC sees this as essentially a big data analytics issue and Silver Tail's solutions will give their customers a more efficient way to monitor and attack online security problems. According to blog post from Scott Weiss, a partner at Andreessen Horowitz, which was a primary funder of Silver Tail, the company counts two-thirds of U.S. banks as customers. What's more, in the last 18 months, it has grown from just a dozen employees to more than a 100. It was started by Mike Eynon and Laura Mather, who worked together on the anti-fraud team at eBay/PayPal.

All Things Digital reports that Silver Tail received a $20 million Series B investment from Andreessen Horowitz in June 2011. Further, All Things Digital is pegging the purchase price in the $300 to $400 million price range, although this hasn't been announced officially yet. 

If this company can increase EMC's ability to find fraud online as it happens, this is a tremendous boon for them and it's no wonder they are so excited about it, and that they were willing to pay so much to acquire this technology. It fits in the overall corporate vision of leveraging big data and analytics, and should give it inroads with a set of customer scenarios that RSA might not have been equipped to deal with before.

For more information on this deal:
- see the EMC press release

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