Nemertes Impact Analysis:

In adding pre-installation of privately held Credant’s Mobile Guardian security encryption solution on its desktops and laptops, Dell (NASDAQ:DELL) is reacting to increasing enterprise concern over protecting data confidentiality. Nemertes finds meeting privacy requirements the most onerous form of compliance for most companies.

Of particular concern are amendments to the Massachusetts Privacy Law that went into effect on March 1, 2010 requiring any organization that retains data on Massachusetts’s citizens to have a written Information Security Plan that identifies controls to protect confidential personal information. Credant’s Windows Shield and Enterprise Server (Dell Editions) provide encryption for user and application data along with enterprise key management for data recovery and enforcement of user-level security policies.

Impacts:

Enterprises: Evaluate the updated Massachusetts Privacy Law and implement a key management and data at rest protection plan.

Vendors: Dell follows Lenovo (PINK:LNVGY) and HP (NYSE:HPQ) which bundle privately held Sophos SafeGuard (Utimatco) and McAfee (NYSE:MFE) Endpoint Encryption (SafeBoot), respectively.

Investors: This move squeezes the market for privately held Becrypt, BitArmor, Mobile Armor, Wave Systems and WinMagic between bundled solutions and freeware such as TrueCrypt.

Ted Ritter, Senior Research Analyst

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