Akamai To Buy Cybersecurity Vendor Janrain To Get Identity Access Skills

Akamai Technologies has agreed to purchase Janrain to improve the security around customers' apps, websites and APIs by integrating customer identity access management capabilities.

The Cambridge, Mass.-based technology vendor said its proposed acquisition of Portland, Ore.-based Janrain will result in increased accuracy in mitigating identity fraud. Akamai customers are expected to immediately see security benefits around bot management and threat intelligence, which is critical since nearly 40 percent of users employ the same or very similar passwords across online accounts.

"Janrain's Identity Cloud, working together with Akamai's Intelligent Edge Platform, will provide an added layer of security to allow our customers to know more about their end users and potentially drive additional revenues from that deepened relationship," Rick McConnell, president of Akamai Technologies and general manager of Akamai's web division, said in a statement.

[Related: 2018 Security 100: 20 Coolest Identity Management And Data Protection Vendors]

Terms of the transaction— which is expected to close early this quarter—were not disclosed, although Akamai said the deal is expected to decrease non-GAAP net income per share by $0.05 to $0.06 in 2019 before boosting non-GAAP net income in 2020. Akamai's stock is up $1.39 (2.34 percent) to $60.77 in trading Monday morning, and executives weren't immediately available for additional comment.

The acquisition will help Akamai's customers establish and maintain digital trust with their users by providing a highly secure and resilient environment for collecting and storing sensitive user information, maintaining privacy controls, defending against identity fraud, and improving engagement and brand loyalty, according to the company.

Combining Akamai's bot manager and Janrain's capabilities will allow customers to make better decisions about which users should be allowed to access registration and login pages based on reputation built on past online behavior, the company said. The integrated technology will also safeguard against malicious activity including fraudulent account creation and credential compromise.

"By combining the scale and intelligence of Akamai's Intelligent Edge Platform with Janrain's Identity Cloud, we believe we can realize the promise of delivering a more accurate and sophisticated customer identity management solution and enable trusted digital experiences that are unique for every user," Jim Kaskade, Janrain's CEO, said in a statement.

Akamai Bot Manager mitigates the risks associated with credential abuse by detecting and managing bot activity at login and registration time, which reduces fraud without negatively impacting the user experience, according to the company.

Janrain was founded in 2002, employs 178 people, and has raised $79.8 million in six rounds of outside equity, according to LinkedIn and CrunchBase. The most recent infusion of funding came in December 2015, when Janrain hauled in $27 million in a Series D round led by HighBar Partners.

Akamai, meanwhile, was founded in 1998, employs 6,976 people, and achieved $2.5 billion in sales in 2017. More than half—or $1.3 billion—of Akamai's 2017 revenue came from its web division, which is where Janrain's capabilities will be housed.

The company has carried out 24 acquisitions in its 21-year history, according to CrunchBase, with recent deals including its 2017 purchases of recursive DNS functionality provider Gmright, DNS software and application provider Nominum, and performance analytics firm SOASTA.

Janrain works with global systems integrators, agencies and consulting firms that are trained and certified in implementing, configuring, customizing and supporting the Janrain Identity Cloud for enterprise clients. Some of the company's solution provider partners include Accenture, Capgemini, Deloitte, EPAM Systems and Wipro.

Akamai, meanwhile, works with resellers, systems integrators, application service providers, referral partners and sales agents to better market services and encourage increased adoption of the company's technology. Some of the company's channel partners include AT&T, Deutsche Telecom, IBM, Orange Business Services and Telefonica Group, according to a U.S. Securities and Exchange Commission filing.