Telecom carrier AT&T said it will enter the managed security services market with a standalone business in a joint, private equity deal with WillJam Ventures, a Chicago-based venture firm backing early stage cybersecurity startups.
AT&T will retain an ownership stake and board representation in the new entity. WillJam said the venture will perform as its preferred security partner. There is no word on what the business will be called.
Terms of the deal were not disclosed. AT&T expects the transaction, which is subject to regulatory reviews and customary closing conditions, to close in Q1 2024.
The Goals Behind the Deal
This arrangement allows AT&T to continue offering managed security services, while simultaneously focusing on enhanced network-based security capabilities, the carrier said. Its cybersecurity efforts will focus on small- to medium-sized business (SMB) customers.
AT&T is not often included in discussions of managed security services top providers, and it has long lagged behind Verizon, which has a large share of the market. Verizon's annual Data Breach Investigations Report, a comprehensive view of the segment, is widely regarded by security companies as a primary source for key information by players in the market.
Melding Network Embedded Security with MSSP Capabilities
Still, AT&T has bold plans for the new business with a blueprint to bake security services into its connectivity lineup. The move will create a new category of security for SMBs by melding network embedded security with managed security service provider capabilities, the firm said. The company did not identify which of its products will house enhanced managed security features but did allow that it is currently testing a limited pilot program for the new software portfolio.
Rick Welday, who heads AT&T’s enterprise markets said security has always been top of mind for the carrier.
“Our direct focus remains on unlocking the power of our best-in-class connectivity with embedded security features that will allow our network to intelligently protect customers end-to-end. We’re energized about this new business model and the opportunities and capabilities these network enhancements will bring to the market.”
Bob McCullen, WillJam Ventures managing partner, said the market is more “dynamic and challenging than ever.” With “rapidly expanding” attack surfaces and an “intensifying cybersecurity skills gap,” businesses have more incentives to “safeguard their digital assets,” he said. The joint venture will be “uniquely positioned to protect organizations globally,” he said.