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BT buys Bruce Schneier's security company

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BT,
Bruce Schneier

Tom Espiner in Nice ZDNet.co.uk

Published: 25 Oct 2006 12:20 BST

Telecommunications giant BT has acquired Counterpane Internet Security, the threat monitoring company founded by security expert Bruce Schneier.

The deal to acquire Counterpane was finalised on Tuesday and announced on Wednesday morning. Both chief technology officer Schneier and chief executive officer Paul Stich will remain in their present roles.

"We are all now BT employees," Schneier told ZDNet UK on Wednesday. "And we'll all get paid in pounds, at par."

Financial terms weren't disclosed, but BT indicated that it had spent at least $20m (£10m) on the purchase. It said it had acquired Counterpane in part to get Schneier's skills, and in part to expand its managed security services offerings.

"Bruce brings a part of the value because he's a recognised industry figure," said Ray Stanton, global head of business continuity, security, and governance at BT. "But we're also buying the intelligence capabilities and people of the company. We're buying the organisation, with Bruce as a bonus," Stanton told ZDNet UK.

BT bought Counterpane to expand its managed security services portfolio. Currently BT sells two layers of services to its customers — basic upkeep of IT security, and basic reporting capabilities. The addition of Counterpane will allow BT to implement a third layer of "proactive threat monitoring", according to Stanton.

BT has already designed and integrated managed security services into 21CN, the multi-billion pound upgrade of its UK-wide communications network. Integration of Counterpane services will take place over the next 12 to 18 months. The organisation itself will continue trading as a standalone until April of next year, when BT may co-brand the company as BT Counterpane. Eventually the company will "probably be known as BT", according to Stanton.

"BT calculated that acquiring a business with an established reputation and capability was preferable to either building a capability from scratch or entering into a looser partnership with another supplier," said Ovum analyst Graham Titterington on Wednesday, adding that the move "will also help BT to establish a higher profile in the US".

The deal to acquire Counterpane has been in the offing for a year, according to Schneier, who believes it will bring significant benefits.

"Counterpane works best inside a larger company, and managed security services work best as part of a suite of managed IT services," said Schneier.

According to Schneier, BT's biggest concern when acquiring Counterpane was the ability of the company to deal with scaling up to the size of BT's network.

"It's like handing us a zillion-node network — we've never done that before," said Schnneier. However, the pace of integration will mean a gradual expansion of operations, Schneier added.

BT and Counterpane will establish a Security Operations Centre (SOC) in Europe, to expand operations from the current Counterpane SOCs in Tokyo and on the east and west coasts of the US — in Mountain View, California and Chantilly, Virginia. The new SOC will probably be located in London.