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BT Acquires Counterpane| October 26, 2006 | Business Telecom Services - Europe | Competitive Intelligence Report | Client Access Analyst: Dustin Kehoe
On October 25th BT announced that it would acquire Counterpane, adding the managed security services firm to its stable of global professional capabilities. The acquisition will allow BT to benefit from Counterpane’s security management technologies and let it deliver a proactive managed security service with auditing and reporting capabilities to its global customers. Analytical Summary • Current Perspective: Positive on BT’s acquisition of Counterpane, which is a managed security service provider (MSSP). BT can now hit back at some critics with an improved security focus in the area of network security monitoring. This will provide the company with greater accessibility to C-level executives as well as a stronger security message platform. • Vendor Importance: Very high to BT, because the company needed to improve its focus and capabilities around the area of security. This comes at a time when carriers and system integrators alike are attempting to increase their security expertise and are acquiring managed security providers (e.g., IBM and ISS). • Market Impact: Moderate on the European managed IP services market. While all carriers are moving deeper into the LAN, desktop and application environment to capture more ICT spend, security has been a much harder sell for carriers (as well as traditional system integrators). This trend has favoured MSSP specialists. The Counterpane acquisition will force the hand of major pan-European competitors, especially if BT can successfully bid and win on its own more often than not. Recommended Competitor Actions • European competitors should consider similar acquisitions of MSSPs, or at least re-examine their existing partnerships and identify ways to make a more cohesive offering. This will be important for addressing legitimate customer concerns, whilst competing and successfully winning more security business. • T-Systems should continue to take the high road in this debate and stress that it is the only European carrier that also has a vibrant IT and security business. As support, it should stress that it has 18,500 employees working in IT operations and another 13,000 in desktop management. • Orange Business Services should continue to promote itself as a market leader within the managed security space drawing on the resources of 200+ security experts and 900+ customers. • To counter the BT acquisition, AT&T should continue to promote its ‘Internet Protect’ platform, which handles all security alerts and offers proactive warnings and incident reporting. • IBM needs to tout its acquisition of ISS assets, which included ISS’ global footprint and presence as well as its multinational clients.
• Enterprise customers should consider BT’s new security competence with the Counterpane acquisition. The company offers strong competencies in the area of security monitoring (e.g., intrusion prevention, detection and response). It also focuses on both internal and external aspects of security to provide a well-rounded approach. • Potential customers should inquire about the timetable regarding migration and integration for this merger. While BT has integration experience with past mergers and plans to operate BT Counterpane as a subsidiary in the short term, there are the risks of disruptions that these changes can evoke. • Customers should be pleased with the greater access to resources, channels and client contacts, especially the opportunity on a global basis and in the United States for these services and its other professional services, such as IP VPN. • Potential customers need to perform due diligence and compare pricing and services from global providers such as IBM/ISS, Cybertrust, AT&T, Verizon Business and Symantec, which also command considerable respect for managed security services. Business Telecom Services - Europe
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