Security provider Guardent announced yesterday that it is in the
process of acquiring DefendNet Solutions, for an undisclosed
sum.
Guardent co-founder and executive vice president, Dan McCall, said
the acquisition would give the security provider access to a more
diverse client base and a "telco-grade operations centre in
Providence."
Guardent provides security and privacy programs to Global 2000
companies, while DefendNet's client base grew out of small and
mid-size businesses looking to host secure Web sites. "DefendNet
was not in a position to go it alone," McCall claimed.
McCall said that although DefendNet had a good business plan, in a
soft economy, a company had to have a perfect plan that was
perfectly executed. "There is not a lot of tolerance" in today's
conditions, he added.
An employee at DefendNet confirmed yesterday that the company had
been acquired by Guardent.
In recent weeks, at least two security providers have fallen on
hard times. Baltimore Technologies in Dublin announced last week
that it was cutting its staff by 18%. While late last month, Pilot
Network Services suspended operations and laid off all of its
employees.
McCall said that while the current economic climate has been
difficult for some firms, the security industry appeared to be
settling down. "Things are starting to stabilise," he said. "This
feels a lot like the early 1990s, when you actually had to work for
a living."
He said that the following three main trends continue to drive the
security business:
Firstly, new government regulations, such as the Health Insurance
Portability and Accountability Act, are focusing attention on
privacy concerns. Secondly, brick-and-mortar companies are still
moving ahead with building Web sites, despite the slowing economy
and recent cutbacks by dot-com companies. And thirdly, said McCall,
"The bad guys are still out there."
In addition to the acquisition, McCall said that Guardent plans to
announce a package of $20m (£14m) in Series C financing, led by
Citicorp Strategic Investments. Mercury Interactive and existing
investors Charles River Ventures, New Enterprise Associates and
Sequoia Capital also participated in the latest funding round. In
addition, Kate Sullivan, chief operating officer for Citigroup's
e-Citi unit, has joined Guardent's board of directors.
McCall said having a broad base of financial support allowed his
company to acquire DefendNet and hampered that company's ability to
remain independent. DefendNet, he said, had only one main backer.
In addition to DefendNet's assets, Guardent will also absorb about
20 employees. McCall admitted that some employees at DefendNet may
have recently lost jobs, but said the redundancies had occurred
before the acquisition and that he had no information about them.