When the news came on 7th April that Singapore-based telco Singtel will acquire TrustWave Holdings, the largest U.S. independent provider of managed security services, for US$810 million, it made a big splash in the tech space.
Singtel, a large operator based in Singapore, owns stakes in mobile companies in Indonesia, the Philippines, Thailand, Bangladesh, India, Sri Lanka and countries in Africa. In Australia, Singtel runs Optus, one of the country's major operators. The question was: why was a telco like Singtel getting into the security space big time?
Does Singtel want to be a security vendor?
"This acquisition is consistent with strategies that many leading telcos are using," says David Kennedy, Research Director Telecoms at Ovum. "Telcos want to sell a value-added services to business, and security is a leading upsell that they can add to the basic connectivity service. This leverages the telco's traditional relationship with the customer, and makes the relationship more strategic and enduring."
"SingTel has clearly demonstrated its strategic view and how it looks at cyber security as the enabler of its transformation," says Anmol Singh, Principal Research Analyst, Security & Privacy at Gartner, reacting to Singtel's acquisition of TrustWave. "Trustwave is a well-recognized managed service provider offering several security technologies, and it's acquisition will provide SingTel the strategic outreach within the 'cyber security' and 'digital business' avenues it has lately been venturing into including media, advertising and smart city planning initiatives. SingTel's recent partnerships with FireEye and Akamai Technologies are the testaments of its commitment to provide advanced security services to its customers, combined with a secure ICT solution."
Why is this acquisition important for Singtel?
"In addition to Trustwave's global security operation centers (SOCs) located in North America, Europe and Asia, this acquisition brings SingTel the depth and breadth across the security technologies - ranging from unified threat management to application security and malware protection offered by Trustwave," says Singh. "Not only this acquisition provides an opportunity for SingTel to capitalize on a rapidly expanding security services market in the region, but also supports its global growth objectives."
"This is a significant forward-thinking move by SingTel in a capability that is gaining the interest, and concern, of CEO's and Board members," says Simon Piff, Associate Vice President, Enterprise Infrastructure, IDC Asia/Pacific. "Cyber threats are pervasive and are becoming a significant business cost that should be avoidable. But managing IT security is complex, costly and challenging and so makes an ideal candidate for a managed service. Critically here is the essential aspect of trust, and in that respect SingTel benefits from the reputation that Singapore, the country, has globally. Seen as a safe, secure global financial centre will certainly not harm SingTel's ability to market themselves as a trusted partner. That SingTel plans to keep Trustwave as a separate business unit makes sense for the US and European markets, but for Asia they can leverage, for the most part, the SingTel brand to gain acceptance."
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