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Password management company LastPass plans to focus its resources on developing mobile features faster for the small and medium-size business space after it becomes an independent company next year.
This week, LastPass said it would spin off from its parent company LogMeIn after a private equity firm acquired the latter for $4.3 billion last year. The firm, Francisco Partners and Evergreen Coast Capital, plans to retain control of both LastPass and LogMeIn. LogMeIn acquired LastPass for $110 million in 2015.
Following the split, LastPass will focus on delivering product features faster and improving customer support, said Dan DeMichele, product vice president at LastPass. The company also plans to expand its mobile password management operations. Mobile accounts for about 40% of LastPass's business.
"[The separation] is going to enable us to deliver enhancements to LastPass much quicker than we were able to before," DeMichele said.
LastPass has 30 million users and sells its products to more than 85,000 businesses. The company's services include identity and access management features like single sign-on and multi-factor authentication. It competes with Okta, Transmit, Beyond Identity and products from Microsoft and Google.
LastPass has not named a CEO, executive board or the location for its headquarters. Of the 3,800 LogMeIn employees, 350 will work for LastPass, The Boston Globe reported.
The equity firm likely determined that LastPass could generate more revenue as a standalone company within a growing market, said Merritt Maxim, an analyst at Forrester Research. "The password authentication market is very hot right now."
Spending on identity management technology will increase from $12.7 billion in 2020 to $19.8 billion in 2023, according to Gartner.
However, companies offering password-less options for identity management present a competitive challenge to LastPass and its rivals, said Omdia analyst Rik Turner. For example, Microsoft offers an authenticator mobile phone app that lets customers sign into their 365 accounts without using a password.
But companies like LastPass have an advantage because their software lets people log into many different accounts, each with a unique password, DeMichele said. It also lets administrators set more than 100 different policies, such as password character minimums.
Nevertheless, hackers continue to compromise password-based authentication. In October, an Iran-backed hacker group used password spraying, a type of brute force attack, to compromise Microsoft 365 accounts that did not use multi-factor authentication.
Maxim Tamarov is a news writer covering mobile and end-user computing. He previously wrote for The Daily News in Jacksonville, N.C., and the Sun Transcript in Winthrop, Mass. He graduated from Northeastern University with a degree in journalism. He can be found on Twitter at @MaximTamarov.