• United States

VeriSign to acquire Guardent

Dec 17, 20033 mins

VeriSign Wednesday announced it is buying Guardent, a managed security service provider, for $140 million in stock and cash.

The acquisition, which still must be approved by regulators, will add Guardent’s 150-person staff to VeriSign’s managed security services business, the companies said. It will also bolster VeriSign’s standing in the growing market for outsourced security management services, said one industry expert.

Guardent, of Waltham, Mass., offers a variety of security services for its customers, including managed firewall, VPN and intrusion detection system services. The company also offers consulting services such as vulnerability assessments, computer forensics and network architecture reviews.

Technicians in Guardent’s secure operations center (SOC) monitor customers’ network devices and traffic continuously for evidence of attempted intrusions or violations of security policy, notifying network administrators if suspicious behavior is spotted. Guardent also has hardware, the Security Defense Appliance, that enables technicians at the SOC to remotely install software patches or new security features for customers.

Guardent’s services, technology and customers will become part of VeriSign’s Managed Security Services group. Also, Guardent’s Providence, Rhode Island, SOC, professional services and sales groups will be folded into VeriSign’s operations, the companies said.

The deal offers something for both companies, said John Pescatore, an analyst at Gartner.

For Guardent, joining with VeriSign offers financial stability and name recognition, which are important for Fortune 500 companies that may be interested in outsourcing security, but are leery of small, private companies, he said.

While demand for managed security services grew steadily in recent years, companies like Guardent are competing for customers against bigger managed services players such as Electronic Data Systems, IBM and Computer Sciences, which often take on managed security services as part of larger network management outsourcing deals, Pescatore said.

For VeriSign, purchasing Guardent bolsters its managed security services business, which was still small, despite a high-profile deal earlier this year to manage Merrill Lynch & Co.’s global operations. Adding Guardent’s managed devices to its own instantly makes VeriSign one of the largest managed security services companies, Pescatore said.

VeriSign will also benefit from picking up Guardent’s TeraGuard management software and from Guardent’s sterling reputation as a security services company, he said.

VeriSign’s reputation has suffered in recent months from the company’s sudden decision to stop reselling security products by Check Point Software Technologies Ltd. and the public imbroglio over VeriSign’s Sitefinder service, which redirected user requests for nonexistent domain names on the .com and .net domains, which VeriSign manages, Pescatore said.

The purchase of Guardent management and its technical staff should ease those concerns, Pescatore said.

VeriSign’s acquisition of Guardent will put more pressure on the remaining MSSP’s such as CounterPane Internet Security to increase the number of devices they manage, take shelter under the umbrella of a larger company or find niche vertical markets to specialize in, he said.