Proofpoint CEO Sumit Dhawan On ‘Market-Changing’ $6.3B Varonis Deal, IPO Goal

The planned acquisition of publicly traded data security vendor Varonis will enable Proofpoint partners to deliver a ‘comprehensive data security solution to their customers,’ which is primed for combating AI and agentic risk, Dhawan tells CRN.

Amid the surging adoption of AI agents, Proofpoint’s “market-changing” deal to acquire Varonis is aimed squarely at helping partners and customers to protect the data those agents can access, Proofpoint CEO Sumit Dhawan told CRN.

In an interview Friday—a day after Proofpoint’s $6.3 billion deal for publicly traded Varonis was announced—Dhawan said that the planned acquisition seeks to bring together complementary technologies for securing data and AI agents, while giving partners an even more strategic role with their customers.

[Related: 5 Things To Know On Proofpoint’s $6.3B Acquisition Of Varonis]

The deal ultimately is positioned to enable Proofpoint partners to deliver customers a broader data security platform that is primed for combating AI and agentic risk, he said.

With the combined Proofpoint-Varonis platform that is envisioned, partners will be enabled to “take a comprehensive data security solution to their customers—becoming more strategic, providing more value-added services,” Dhawan said. “And No. 2, they now can work with a single [data security] provider with a larger business.”

The combination of Varonis with Proofpoint, which was itself publicly traded until its acquisition by private equity firm Thoma Bravo in 2021, is also poised to strengthen Proofpoint’s positioning for an initial public offering, Dhawan told CRN.

“We think it’s going to be even more attractive to public investors, and our goal would be to assess that after close,” he said.

The combined company would have more than 8,000 employees with annual recurring revenue (ARR) of more than $3 billion, according to figures disclosed by the companies.

Upon completion of the combination of the two vendors, “it’s a top-five cybersecurity company with healthy growth—and more importantly, [providing] the next frontier of protection, which is data,” Dhawan said.

What follows is more of CRN’s interview with Dhawan.

What does this deal mean for the industry and the channel?

It’s a game-changing moment—just bringing together Varonis and Proofpoint makes us the [premier] data security solution in the market, especially in the world of AI. So we’re very excited.

It sounds like the ultimate plan is for this to be a combined solution from the two companies, as opposed to being Varonis operating independently of Proofpoint?

[Varonis CEO] Yaki [Faitelson] and I started the conversations a while ago. And we always compare notes on the market and whatnot. [We are] largely complementary. And earlier this year, as this whole agentic era starts shaping up, we said, look, there is clearly a next frontier on cybersecurity emerging, which is data. AI is attacking data from outside, and AI is attacking data [from] inside. And data protection needs to be done holistically. That was the vision that brought us together—to say, not just that we can have one house that will be able to serve all the portfolio. But if you’re really providing data protection, it needs to be done with machine speed. And machine-speed level of protection, in the world of AI, means integrations of our signals and control points. And that’s what our vision is. We believe we can accomplish that very, very quickly, based on just how complementary our technology stack is.

What are you hearing from your customers and your partners about how urgent of a need there is for something like this?

The whole conviction of ours is rooted on the principle that this is a board- and CEO-level priority. [When] you think about it, AI and cybersecurity, those are the two priorities for the board and CEOs. And they go hand-in-hand. Without data security, you can’t enable and adopt AI. So to me, that sort of is the grounding fact for the conviction that we have, on why data becomes the next frontier for cybersecurity—and why Proofpoint and Varonis becomes the only player that no other [vendor] can do, [providing] a full and comprehensive solution for protecting data in today’s AI-accelerated risks.

Can you say whether the combined company will operate entirely under the Proofpoint brand, or whether Varonis will still exist as a brand in some form?

We’re going to talk through it—we’re going to think that through. Those things get sorted out as we go. [Both companies have a] strong product, strong following in the customer base. So we don’t have any desired intent to make one change or the other. But it’s something we’ll figure out between now and close [of the deal].

As far as what Varonis brings in product capabilities, what specifically are you most excited about? And what do you think partners are going to be really excited about from Varonis?

What Proofpoint has built is sensing how people and AI behave when they’re interacting with data and each other—that’s our focus area. Intent-based protection, as we’ve always talked about, when people, AI and data come together. What Varonis has built is making sure that [businesses understand] where the data is and how it is getting protected based on privileges and usage. So these are a complementary set of signals. We are getting the signals on the intent and behavior, and they’re getting the signals at the data layer. Combining the two together gives you the right protection of data in today’s AI and machine-speed era. That’s the complementary nature of the solution. I’ve gotten so many positive feedback in less than 24 hours, and it’s all been about this—[they’ve been] waiting for [a vendor] who brings data security together. And Proofpoint and Varonis, because of the complementary nature of the solution, [can] become that company.

It sounds like some of the capabilities that Varonis has in certain areas are bringing something a bit different to your platform?

We already have data security solutions. We’re the market leader for DLP [data loss prevention]. We’re the market leader for insider risk solution. Those are complementary to the data security and access governance solution that Varonis brings. You combine them together, and now you can protect data at rest, and you can protect data in motion, as used by humans and AI. So think of it as data security at two different layers, working together, through a combination of signals and protection.

Are you saying how many employees the combined company will have?

Varonis has more than 2,500 employees [and] publicly we have said we have closer to 5,500 employees. As a combined company, it’s an at-scale company. We have publicly said that our ARR exiting midyear was closer to $2.5 billion. They have publicly said a little shy of $800 million exiting June. So you’re talking about a company of scale. It’s a top-five cybersecurity company with healthy growth—and more importantly, [providing] the next frontier of protection, which is data.

Envisioning the bringing together and combining of these two companies, you would say this is going to be very differentiated?

If you look at other top-five cybersecurity companies, none of those platforms were designed and built to do data protection. They’re [from] different eras of cybersecurity—endpoint, network. We become, together, the company that protects data from external threats as well as insiders. Both are being accelerated because of AI.

On the partner front, what should partners of both companies know about what this means?

Partners are excited. It happened to be that yesterday we had a European partner council, and our head of Europe was running that partner council when the news broke. And many of them said, “Hey, look, Varonis is one of our top partners. Proofpoint is one of our top partners. Together, you become maybe the No. 1 or No. 2 partner of ours going forward.” From a partner’s perspective, No. 1, most importantly, they can take a comprehensive data security solution to their customers—becoming more strategic, providing more value-added services. And No. 2, they now can work with a single provider with a larger business—which is what partners want, anyway.

Previously you talked about potentially going public at some point—probably it’s not something you would be looking at doing prior to closing this, but is there any update there?

Like you said, our focus is going to be on [closing the acquisition]. And we hope to go through the regulatory process and close the transaction as early as possible. And then we think that the combined company is quite attractive to the public investors. It’s an at-scale company, driving protection of one of the key pillars, just like any other major cybersecurity platforms are doing. We think it’s going to be even more attractive to public investors. And our goal would be to assess that after close.

Agents are something that so many businesses are grappling with, and it sounds like this combination is very much going to be tuned toward helping companies with that?

Exactly. There isn’t a day that goes by whereby we don’t read the news about risks that AI agents pose. Risks that AI agents pose doesn’t mean you have to slow down the adoption. It just means that you need to adopt AI with the right degree of security. What are these risks going after? You read all these stories. Eventually, the issue is that these AI agents go to data [systems], and the data is captured in so many different places. So enterprises need comprehensive solution that can both work on protecting the behavior of AI and protecting the data, regardless of where it exists. And that’s what Proofpoint and Varonis offers. It provides a solution that enables enterprises to go pick any agents of their choice. They’re not locked in. Go pick and enable access to any data of their choice. And in that environment, their data is protected, and they can adopt AI with speed.

There are so many different vendors coming out and saying they’re going to have some solution to this. But it sounds like part of the idea here is if you’re already protecting the data—as you and Varonis are—then you’re really in the best position to help with the agent problem, if the agent is ultimately trying to access data?

That’s 100-percent right. There is no use solving a sliver of the problem. These are interconnected problems—because eventually, agents have to access data. By protecting data, you extend that protection to protecting AI agents. So that’s why our solution in protecting agentic security—through an extension of protecting data—becomes even more powerful and real for customers.

Overall, what is the message for your partners out of this, and what is the major opportunity for them?

Firstly, I want to thank the partners that have really built the business for us. We couldn’t do it without them. And this is game-changing. It’s a market-changing, game-changing [deal], really helping customers together with partners. We can be their strategic advisors, a platform for protecting the next frontier of cybersecurity, which is data, and all driven because of AI.