AT&T

The consolidation frenzy in tech-land continues unabated. Since only one of these deals is security related, I thought I'd do a wrap-up post quickly summarizing each deal and underscoring some of the trends that drive these hook-ups, since none of these would make the TDI cut themselves.

In TDI format, here goes:

Deal: Verano finds the eDMZ
So what? - Verano is a company you've probably never heard of, unless you are in the utilities business. They provide security services for this vertical in the form of understanding SCADA systems. I'm not exactly sure what that means, but evidently they do OK at it. Buy buying the struggling eDMZ's managed services offerings (eDMZ who? - which is exactly right), Verano can now address one of the big blind spots in the land of utilities - protecting the SCADA system. Like smaller financials, many of the utilities don't have the resources to really protect their systems, and if something goes down - it's very inconvenient for the residents. This is a logical move for Verano and we will see more of this niche industry consolidation of players that couldn't make it on their own.
http://www.verano.com/news/pr091206.php

Deal: AT&T pledges allegiance to the USi
So what? - I can honestly say that USi was my worst investment ever. I'm not sure i'll ever make back my capital losses on that one. But it's interesting that AT&T would take them out at this point. Clearly AT&T has to figure out how to climb the stack and outsourcing applications is one way to do it. They still own Sterling Commerce and now with USi are going to be able to have different conversations with customers with this stuff in the bag. From a security viewpoint, it's about application securty and what are they doing to ensure my data (it doesn't get more sensitive than HR and ERP data) is protected? Will AT&T be able to scale the model cost effectively? But given the negative margins in many of their other businesses, this seems to be a logical direction. How long before Verizon copies this strategy too?
http://www.sbc.com/gen/press-room?pid=5097&cdvn=news&newsarticleid=22676

Deal: Apptix says check-Mi8
So what? - Apptix recently acquired my managed Exchange provider, and now they are taking out another player - Mi8. None of these services are big money players (all have been doing about $4-5 million /quarter), but if you put them all together and apply some economies of scale this could be a cash register. And you get a presence in many of these SOHO small business that will increasingly be looking to outsource more of their infrastructure. Again, security is adjacent to this deal, only in trying to figure out how your data is going to be protected - given the sensitivity of stuff that is stored in email. But there is no doubt that managed offerings are gaining traction in the 1-100 employee segment, and Apptix is willing to spend the money to be a player.
http://www.apptix.com/media/pressreleases/091106/

Stay tuned, I suspect the investment bankers will remain busy for quite a while disposing of the too-many VC funded companies that remain in tech-land. If those folks weren't so parasitic, maybe that's something I'd suggest to the kids.