CEO Chris O’Malley on Why LogRhythm, Exabeam Opted to Merge – Source: www.databreachtoday.com

Next-Generation Technologies & Secure Development
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Security Information & Event Management (SIEM)
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Security Operations

World’s Largest Pure-Play SecOps Vendor Will Have Leading On-Prem, Cloud SIEM Tools

Michael Novinson (MichaelNovinson) •
July 17, 2024    

Two SIEM stalwarts completed a merger Wednesday that their CEO said will bring industry-leading capabilities to customers both on-premises and in the cloud.

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The combined company will standardize on Exabeam’s New-Scale cloud SIEM product given the market traction it has enjoyed since its October 2022 debut and retire LogRhythm’s competing Axon offering. Due to the success of New-Scale, the company will move forward under the Exabeam name but with Chris O’Malley – who had led Thoma Bravo-owned LogRhythm since February 2022 – as its top executive.

“Both of us have done a tremendous job over recent years. But when we look at the face we want to bring to the world, the Exabeam one is just a more innovative brand,” O’Malley told Information Security Media Group. “And specifically, New-Scale is the product that we’re betting the ranch on.”

Thoma Bravo – which took a majority stake in LogRhythm in July 2018 – will be the combined company’s majority owner going forward, while investors in venture-backed Exabeam – which include Blue Owl Capital, Sapphire Ventures and Lightspeed Venture Partners – will retain a minority stake. Adam Geller – who joined Exabeam as chief product officer in June 2020 and became CEO in June 2023 – will depart (see: SIEM Stalwart LogRhythm to Merge With Exabeam).

The Road Ahead for Exabeam

As CEO, O’Malley wants to maintain the current pace of innovation for both cloud-based and on-premises SIEM while creating a business platform that can aggregate technology through acquisitions and achieve sustainable growth. O’Malley said his experience with both product innovation and business platform creation makes him a good fit to continue as CEO and is essential to navigating the security market.

Nearly 600 organizations have adopted Exabeam New-Scale in just 21 months, and O’Malley said the product helps CISOs transform generalists into Level 1 analysts, continuously improve their security operations and effectively communicate value to justify investments. Specifically, he said, New-Scale boosts investigative capabilities with AI, provides maturity assessments and helps benchmark progress.

O’Malley said the use of generative AI in Exabeam’s platform has significantly reduced investigation times for security incidents, enhancing the efficiency and effectiveness of security operations. New-Scale supports CISOs by providing context and guidance on what steps to take next as well as robust methods to communicate the value of security investments to stakeholders, which is vital due to tighter budgets.

“I’ve never met a CISO that thinks they’ve got more money than they need,” O’Malley said. “They’re woefully underfunded. And part of it is not being able to communicate well the progress that’s being made.”

For the company’s on-premises SIEM, O’Malley said, there are significant growth opportunities in regions and countries adverse to cloud solutions for either cost or security reasons, such as the Middle East, Africa, India and Taiwan. IBM’s push to migrate on-premises QRadar customers to Palo Alto Networks’ cloud-based XSIAM offering means Exabeam’s only meaningful rival for on-premises SIEM is now Splunk.

The new leadership team will contain seven LogRhythm alums and three Exabeam alums. The Exabeam alums have been tapped to lead product management and sales and the LogRhythm alums will assist with business platform stability and scalability, according to O’Malley. He said the leadership team of the combined company leans more toward LogRhythm personnel due to their experience in creating a strong business platform.

Is There More M&A in Exabeam’s Future?

Despite doubling in size through the merger, O’Malley said Exabeam is committed to profitability and returning to the “rule of 40” – where the sum of the company’s revenue growth rate and profit margin exceeds 40% – within a few years. Investment will therefore be focused on top-line growth areas such as product and sales, and tough decisions will need to be made to create efficiency in areas such as HR and finance.

“When you have a merger of equals, it’s two of everything, so we’re making the difficult decisions in terms of the best talent to go forward for the firm,” O’Malley said. “We’re making the necessary hard decisions to create a lean fighting machine.”

Going forward, O’Malley said, Exabeam is open to acquisitions in related cybersecurity fields to enhance its product portfolio, capitalizing on the current market conditions in which many vendors are struggling to stay afloat. Joining innovative technology – both natively developed and via acquisition – with efficient business practices will allow Exabeam to be a consolidator in the cybersecurity market, O’Malley said.

From a metrics standpoint, O’Malley said, Exabeam plans to monitor customer satisfaction, employee engagement and operational efficiency and to focus on continuous improvement and innovation. The deal makes Exabeam the world’s largest pure-play security operations vendor, and O’Malley said the company wants to leverage DevOps, value stream management and agile methodologies to stay ahead.

“By far, we’re the largest exclusively focused security operations vendor on the planet, at least double anybody else within the market,” O’Malley said.