**Editor’s Note: Please click here for a recap of the biggest channel-impacting merger and acquisition news from February.**
Analyst firm IDC predicts that organizations in the security space have a very bright future. The firm forecasts that the security-related hardware, software and services market will reach almost $120 billion in the next three years. Even more promising for the channel, managed security services represent the biggest and fastest-growing category within the tech market, with a CAGR of 14.3 percent.
As incidents of malicious attacks and data breaches continue to make big headlines, organizations of all sizes and in all industries are realizing they need to invest in a robust cyberdefense and are clamoring for a one-stop shop to provide them with end-to-end solutions. As more and more components become integral to the security stack, we’re seeing an increasing number of managed service providers (MSP) and managed security service providers (MSSP) engaging in M&A activity in order to quickly expand their portfolios to meet customer demand. For the same reason, many smaller value-added resellers (VARs) and MSPs without the resources to invest in in-house security talent are turning to larger MSSPs for white-label solutions to present to their clients.
Case in point: Thursday, MSSP Critical Start announced its intention to acquire security analytics platform provider Advanced Threat Analytics. Critical Start is a near perfect example of the trends outlined above in action. The company was founded in 2011 as a security strategy, assessment and implementation service provider, but expanded into managed-security services in 2016 because of customer demand. The MSSP invested in a security operations center (SOC), then partnered with ATA to integrate its zero-trust security analytics platform into Critical Start’s managed-security offering.
The deal is expected to close within the next 30 days, and Critical Start said it plans to offer the same solutions to other VARs and MSPs as a white-label solution — in addition to its own customers. The MSSP, therefore, is investing in developing its own channel in the hopes it will add an additional robust revenue stream to complement its thriving enterprise business.
“We have won major enterprise deals against the largest legacy MSSPs because the combination of our CyberSOC, expert analysts and the ATA platform offer our clients something unique — managed-security services delivered in a completely transparent process using a mobile-first, zero-trust platform,” said Rob Davis, CEO of Critical Start, in a statement.
Security experts, who not long ago were all about attack prevention, now admit that no technology or best practice is capable of defending against every malicious attack. Therefore, the focus of cybersecurity technology is increasingly placing less importance on prevention and instead building out managed detection and response (MDR)
“We’re excited to have the Advanced Threat Analytics employees and technology join Critical Start as they will provide clear and compelling competitive differentiation for us in the rapidly expanding market for MSSP/MDR services,” added Davis.
The terms of the deal are undisclosed, and details of the company’s white-label program are still forthcoming.