Cybertrust was created by a three-way merger between US security companies TruSecure and Betrusted Holdings and Belgian player Ubizen three years ago, and Verizon said that Cybertrust would broaden its security services capabilities and boost its global presence.
The takeover mirrors a similar move from UK telecoms giant BT Group last year which saw it pay an estimated $40m to acquire US security services vendor Counterpane, although Verizon said that its takeover is on a significantly larger scale.
Verizon claims that the Cybertrust deal will make it the leading provider of managed information security services to large business and government customers worldwide, although that claim would be disputed by IBM Global Services, which last August spent $1.3bn to acquire Internet Security Systems, the largest global manager of Cisco and Checkpoint firewalls.
As a privately owned company, CyberTrust does not disclose financial data, but Computer Business Review estimates that its annual sales came in at around $200m. CyberTrust will bring an additional 800 employees to Verizon Business' existing 300-strong security services practice.
Cybertrust services cover risk assessment, security system implementation, and ongoing support, monitoring and managed services. CyberTrust told Computer Business Review last year that around 30% of its business comes from working as a partner to larger international IT services groups such as EDS, IBM and CSC.
As part of the deal, Verizon will also gain control of Cybertrust's ICSA Labs division, which claims to certify 95% of deployed security software. Nancy Gofus, senior vice president at Verizon Business, described ICSA Labs as the underwriter of the security industry.
The company has also shed some divisions in recent quarters. In December 2005, Cybertrust sold its Intellishield Alert Manager service to network equipment giant Cisco for $14m, while the Ubizen unit has made several disposals, including its digital certificates subsidiary GlobalSign last October.
The takeover will put Verizon Business in a better position to compete against BT Global Services and AT&T, its two truly international network services rivals, in the area of security. Managed security services is a fast-growing market and it is easy to see why operators see it as a logical next step as they look to expand their range of network and data services.
According to our parent company Datamonitor, spending on security and privacy services is forecast to rise 13% this year to reach $13.9bn. Some $2bn was spent specifically on managed security services in 2006, and that area is expected to follow a 27% growth curve through 2008.
Managed security services has moved beyond the outsourcing of firewalls and intrusion detection systems, both of which have become commodity markets. With applications increasingly the focus of virus attacks rather than networks, clients are looking for third-party assistance in providing a broader and higher-value range of security services.
Because of its private status it is difficult to assess Cybertrust's financial health and recent performance, and the names of most of its clients remain confidential. However, ISS has in the past named it as one of its main competitors, and the Ubizen unit holds some interesting contracts in the areas of identity management for the Belgian government, highlighting the breadth of its services.
The deal also brings into play other security services firms such as European specialist Articon Integralis, larger US player VeriSign, and the security industry's one true giant, Symantec, which has been consistently tipped as a target for Hewlett-Packard for several years.