Verizon Business acquires Cybertrust

Deal will add to Verizon’s portfolio of managed information security services

Verizon Business today announced a definitive agreement to acquire Cybertrust, a privately held provider of global information security services. Financial terms were not disclosed.

Verizon Business today announced a definitive agreement to acquire Cybertrust, a privately held provider of global information security services. Financial terms were not disclosed.

Verizon Business says the deal will bolster its ability to deliver managed information security services to large enterprises and government customers worldwide. Cybertrust’s 800 employees operate out of 30 locations across the Americas, Europe, the Middle East and the Pacific Rim.

The companies expect to close the transaction in 60 to 90 days.

Cybertrust’s services include identity management, managed security services, vulnerability/threat management, security certification programs and a range of professional services including quantified risk analysis, individual application assessments, and forensics and incident response services.

Verizon Business singled out Cybertrust’s Identity Management group as a crucial aspect of the purchase. Through this group, Verizon Business says it will offer a range of solutions for governments and enterprises to manage electronic identities that enable authentication management, information protection and secure access to resources across enterprise systems.

"This transaction demonstrates Verizon Business' focus on and commitment to providing world-class security solutions," said John Killian, president of Verizon Business, in a statement. "As the world continues to move to IP, this combination creates an essential engine for protecting our customers' operations end-to-end.”

"We felt strongly that we didn't have the global reach or breadth" in managed security services, says Nancy Gofus, Verizon Business senior vice president and chief marketing officer. "This completes the portfolio and gives us global reach."

Citing data from Frost & Sullivan, Verizon Business says the managed security services market is projected to exceed $6 billion by 2011. Indeed, security tops the list of managed service investment priorities for enterprises.

Analysts say the acquisition will help Verizon Business better compete with AT&T in managed security services.

“Verizon Business [and other global providers] have lagged behind AT&T in the security space for some time," says Jan Dawson, vice president of Ovum's U.S. enterprise practice. "Although all the major providers have actively pursued the security opportunity, none has been able to tell as convincing a story, especially around network-based security, as AT&T."

Verizon Business' previous acquisition in this space, the purchase of NetSec for $105 million by the former MCI in January 2005, was significantly smaller and focused domestically on the United States, Dawson notes. Cybertrust has a more balanced footprint globally, with a strong presence in Europe and Asia Pacific as well as North America, he says

Verizon Business also will acquire ICSA Labs, an independent division of Cybertrust that performs security product testing and certification.

Verizon Business currently offers a portfolio of managed and professional security services, including network-based distributed denial-of-service detection and mitigation, firewalls, and managed e-mail and Web content delivery. The most recent is an offering designed to safeguard corporate information from phishing, spyware, malware and viruses.

Cybertrust will help Verizon Business fill out its customer premises-based managed security and professional services capabilities, Gofus says.

But Ovum's Dawson notes that integration will be challenging.

"One reason why AT&T has been so successful in establishing a perception of leadership in this space is that it has been able to tell a convincing story about the security being essentially built into the network," he says. "Cybertrust doesn't have a network-based approach to security, and the challenge for Verizon Business is to integrate the Cybertrust assets in such a way that they become integral to its network, which will be no small feat."

Cybertrust also has exisitng relationships with Verizon Business competitors BT, Orange Business Services and Vanco, Dawson notes. The status of those relationships is now unceratin as the other carriers may not feel comfortable buying these services from a competitor, he says.

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