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Verizon Security Services Set To Explode With Cybertrust Acquisition

The move would add 800 Cybertrust employees to Verizon's security services team of 300 and give it access to Cybertrust operations in 30 locations in the Americas, Europe, the Middle East, and Asia-Pacific.

Companies already paying telecom service providers for their networking services will pay those carriers a little more to secure those networks. That's the thinking behind the proposed acquisition Verizon Business announced Monday, as it looks to more than double its security resources through the addition of security specialist Cybertrust.

The deal, expected to close by mid August for an undisclosed amount of money, would essentially move Verizon from the shallow end of the pool when it comes to managed security services. The move would also give the carrier some fangs in its competition with rival AT&T by adding 800 Cybertrust employees to Verizon's security services team of 300. It would also give Verizon access to Cybertrust operations in 30 locations in the Americas, Europe, the Middle East, and Asia-Pacific.

Beyond increasing the sheer size of Verizon's security business, Cybertrust also offers several security services that address some of the market's most pressing needs, including identity management, vulnerability and threat management, security certification, and Payment Card Industry data security standard compliance. Verizon's plan is to offer these services along with its own denial-of-service detection and mitigation services and network-based firewalls, saving enterprise and government customers the need to buy and implement much of their own IT security infrastructure.

Verizon Business manages 3,500 customer networks and has 30,000 employees overall, with 7,000 of them working outside the U.S. "What we didn't have was a global security capability that matched this," Verizon senior VP and chief marketing officer Nancy Gofus said at Monday's press conference.

It's a strategy that AT&T has been building for some time. Most recently, in early April, the telecom provider introduced its Web Security service, which provides Web-content filtering and screening for malware and spyware, as well as filtering of Instant Messenger traffic for malware.

With Web traffic becoming one of the biggest targets for cyber attackers as companies increase their use of HTTP protocols to pass information back and forth, other vendors are also getting into the on-demand security services market. In late March, Trend Micro, a company that's made its name selling antivirus and Internet content filtering software, announced that its OfficeScan 8.0 software will include the company's Web Reputation service, which offers Internet users warnings about shady Web sites and traffic before they infect their PCs with spyware, keyloggers, or other malware.

Verizon Business isn't the first carrier that's used the strategy of buying an established security vendor to get a firm footing in the security market. BT Group plc in October bought managed security services provider Counterpane Internet Security Inc. for an equally undisclosed amount. Founded by security luminary Bruce Schneier, Counterpane monitors 550 networks worldwide for multinational customers, a good fit for BT, which was looking to expand and develop its global professional services capabilities.

Cybertrust itself is the product of a 2004 merger between TruSecure and BeTrusted. The company also has the distinction of having former HP CEO Carly Fiorina on its board. The appointment came in October, 2005, and was her first move back into the tech market after she left HP.

While it's uncertain whether Verizon will retain the Cybertrust name -- BT kept the Counterpane moniker -- Gofus acknowledged that Cybertrust is widely recognized as a provider of managed security services. Verizon had no experts in identity management or security forensics and has a very limited presence in Europe, the Middle East, and Asia. Still, Verizon's network backbone will provide Cybertrust with a much broader audience for its services. "It's the breadth of things coming together that really addresses customer needs," she said.

One industry analyst says that Verizon is making a shrewd move that will significantly expand its managed security services, if the company can successfully weave Cybertrust's services with its own. "This will likely take some time," said Jan Dawson, VP of U.S. Enterprise Practice for IT consulting firm Ovum, which is part of research firm Datamonitor Corp. "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."

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