VeriSign Announces Retrenchment: Authentication Business Deemed Core

| Nov 19, 2007 | Enterprise Security | Competitive Intelligence Report

| Analyst: Andrew Braunberg

Current Perspective: Positive/Neutral
Vendor Importance: High
Market Impact: Low/Moderate

Event Summary

On November 16th VeriSign outlined its strategic direction for 2008 at the company’s annual analyst day held in New York. VeriSign’s business strategy moving forward will be more tightly aligned with its core competency: providing secure Internet infrastructure services to customers in regions around the world. The strategy will call for divesture of a number of businesses in the company’s portfolio, such as communications, billing, and commerce. This will allow VeriSign to invest more in extending the footprint of its core businesses, such as Web certificates (SSL) and the Internet registry business (VeriSign Naming Services), and developing closely aligned growth opportunities, such as identity protection services.

Recommended Competitor Actions

• Competitors should suggest that VeriSign has likely been attempting to divest itself of non-core assets for some time now but has found no takers. This whole process could therefore be long and unpleasant.

• MSS competitors can portray VeriSign’s lack of clarity in the company’s announcement about the future of some units as little more than a clumsy exit strategy from those markets. Rivals should take care not to criticize the quality of the services themselves, as there is a prime opportunity for them to acquire the services and the customers from VeriSign in the near future.

• Competitors in the managed security services space such as AT&T, IBM, Symantec, and Verizon Business should consider whether VeriSign’s MSS unit might be a good complement to their existing offerings.

• MSS can make a play for VeriSign’s existing customer base, making overtures based on the relative stability of their own businesses and making offers to ease the transition to their offerings by delivering services at an appealing price point and helping customers successfully navigate any migration issues.

Recommended End User / Customer Actions

• Current customers should demand some reassurance about the stability of the company’s service offering, even as they consider competitive offerings. VeriSign’s clients should investigate all of their options, seeking out the most robust, secure, and cost-effective solution.

• Prospective VeriSign customers should look elsewhere, at least until the company sets a definite course. This is certainly not the time to be entering any long or even short-term relationships with the provider.

CLIENTS ONLY

Analytical Summary

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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