Hits the European cyber security market like a thunderbolt: Orange Cyber Defense to acquire SecureLink
Cyber security is a key catalyst to digital transformation and, as such, a must-have for most of the IT services players that want to be relevant in the digital transformation of their clients. This trend can only accelerate as digital transformation vulnerabilities are increasing with threats from cyber espionage and crime, while, as a result, regulation is tightening. This has made the cyber security market one of the most dynamic IT services markets with a growth around 11.7% in EMEA in 2018 and 10.7% until 2020, according to our data (source: SITSI EMEA IT security figures).
The major issue with cyber security, however, is that resources are scare, and it is the biggest issue companies are faced with, according to our latest CISO study. Thus acquiring resources is a priority. Another issue is that cyber security is very sensitive at country level, so gaining local access to clients is very important. On the other hand, many companies are looking for partners that are able to manage their requirements across the world, which means large global service providers. This remains a very difficult equation to solve. With the proposed acquisition of SecureLink, OCD resolves part of this equation: it acquires XXX of those rare resources, becomes a leader in the local Benelux markets, gets an additional position in the UK, while fully entering Scandinavian and German markets. And, of course they will get bigger… As a cherry on the cake, OCD will prevent its competitors from seizing a very rare company: a large European cyber security specialist.
As always, it is not all bright sunshine: SecureLink already is an amalgamation of multiple local cyber security specialists, which will integrate a €40 billion company, even if it has a good acquisition track record. Also, SecureLink is well positioned on the SMB market, with a large reseller activity. It will need some adjustments in positioning with OCD now present. On the other hand, it could help OCD to develop its SMB business activities in other countries.
Ultimately, this deal is a great signal for the cyber security market as a whole, as it proves its importance. It reinforces the strong positions of the European cyber security service providers, which is good news for many European clients who, due to recent regulations such as the CLOUD Act as well as recent spying issues, look for European providers with a global reach.