Hitachi to take Larry Ellison approach to identity management - buy, buy, buy

My phone rang at 8:30 a.m. one day last week, which isn't that strange an occurrence. East coast PR people sometimes seem to think that, since Network World publishes my stuff I must live in Massachusetts. But this call was from someone in the Mountain Time zone who happened to be in California that day. It was Idan Shoham, M-Tech Technology's CTO, and he wanted to make sure I was OK since I wasn't on the list for his press conference that morning. The event would be "interesting" was all that he would say about it. And it sure was. The conference was to announce that Hitachi had bought a majority interest in M-Tech which will henceforth be known as Hitachi-ID. An interesting announcement on many levels.

When a mega-corporation (and Hitachi is one of the “mega-est”) buys a small vendor, frequently the shining lights of the smaller player will soon look for greener pastures to satisfy their entrepreneurial drive. But by not buying 100% of M-Tech, and agreeing to leave the current management lineup in place with the freedom to continue to innovate, Hitachi gets many of the benefits of an acquisition while avoiding a lot of the headaches. This isn’t something everyone could do - it’s very infrequent in the tech industries. I couldn’t imagine IBM, Microsoft or Oracle doing something like this. It might prove difficult in the long run if Hitachi hopes to assemble a number of ready-made applications and solutions into a cohesive identity management suite, but it's something to keep an eye on.

Hitachi has been, really, a non-starter in the identity management space. It has some sort of biometric thingy that Japanese banks use, but otherwise the only time I think of the company is when I’m looking for entertainment electronics. So why is Hitachi doing this? And why M-Tech? That company’s major successes has been with Canadian government offices and agencies. If Hitachi wanted to make a splash, why not go for a higher profile company?

My opinion (I know you didn’t ask for it, but you’re going to get it anyway) is that this is just the first move by Hitachi. It recognizes that all of the parts of identity management from password management to regulatory compliance affect most of its customers. It's tired of having to recommend someone else’s stuff to get the job done. It also recognizes that Idan and M-Tech CEO Gideon Shoham are really knowledgeable about this identity stuff. I think that Hitachi is going to go all Larry Ellison here, and start acquiring pieces of identity management in the same way Oracle has done over the past few years. And it's going to let these two crazy Israelis (they moved from the land of milk and honey to the land of ice and snow, didn’t they?) put it together for them. Remind me in a year and we’ll see how right - or wrong - I was.