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SecureWorks-VeriSign Deal Highlights Acquisition Trend In Security Services

As SecureWorks gets bigger faster, VeriSign pulls out of services business

SecureWorks today completed the purchase of VeriSign's managed security service business -- a move that typifies a continuing trend toward consolidation and specialization in the security services market, according to some experts.

The SecureWorks-VeriSign deal, which was first disclosed in May, is the company's second buyout of a fellow services provider in the past three years. While the financial details of the acquisition were not disclosed, SecureWorks says its post-merger client base is approximately 2,600 clients, including four of the Fortune 10. The merged organization will have about 500 employees, with a presence in about 50 countries and a run rate of about $100 million annually, officials say.

The deal is a microcosm of trends in the security services market, observers say. While providers such as SecureWorks are growing larger by acquiring smaller players, vendors such as VeriSign are downsizing by focusing their product lines and getting out of the services space.

SecureWorks, like other managed services providers, is focusing its efforts on the security services market, which is growing relatively rapidly in an economy that demands more predictable security costs. A recent study by Symantec indicates that 61 percent of enterprises are now outsourcing at least some of their security functions.

In an effort to capture more of the services market, many providers have been making acquisitions during the past few years, buying up smaller and niche providers. StillSecure in February acquired managed security services provider ProtectPoint; Symantec acquired email security services firm MessageLabs in October. The big telcos have also made strong security plays during the past few years, with BT's purchase of Counterpane, and Verizon's acquisition of Cybertrust.

And the trend will likely continue, analysts say. In a report issued in September, IDC predicted that the security services market will continue to see more merger and acquisition activity "as larger, more established integrators and vendors acquire security assets and leverage their existing channels to drive solutions to market."

Interestingly, VeriSign is taking the trend in the opposite direction, choosing to pull out of the managed services market as part of its effort to downsize and improve its focus and profitability.

"The sale of the managed security services business is another important step toward VeriSign's divestiture goals as we continue our focus on core Internet infrastructure businesses," says Jim Bidzos, executive chairman of the board and interim CEO of VeriSign.

Have a comment on this story? Please click "Discuss" below. If you'd like to contact Dark Reading's editors directly, send us a message. Tim Wilson is Editor in Chief and co-founder of Dark Reading.com, UBM Tech's online community for information security professionals. He is responsible for managing the site, assigning and editing content, and writing breaking news stories. Wilson has been recognized as one ... View Full Bio

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