WT Business Beat

By Nick Wakeman

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Nick Wakeman

Managed services drove Raytheon's Foreground Security acquisition

Even companies as big as Raytheon Co. sometimes need a little boost to get into a market area.

That’s the case with the company’s latest acquisition of Foreground Security. I posted a short blog on Monday about the deal, but then I had a chance to talk with Jack Harrington, Raytheon’s vice president for cybersecurity and special missions, and he gave me some more insights into why Raytheon made the quisition.

The deal says something about where Raytheon sees the cybersecurity market headed, and it’s also an example of Raytheon’s strategy to move in new segments of the market.

The boost Raytheon is looking for from Foreground is managed services capabilities, an areas Harrington said the company sees growing in demand across all of its markets – civilian, defense and commercial.

Foreground’s niche in the managed services also is special in that they have developed a couple offerings through the use of proprietary technology and partnerships with other technology companies, Harrington said.

The company has a virtual security operations center, which allows a managed security service to monitor network operations and traffic remotely. It also has an automated threat intelligence platform that pulls together analytics from network sensors and other information on advanced persistent threats.

Together, the two solutions offer what is known as network hunters or cyber hunters. This is a proactive approach to cybersecurity where you use tools and analytics to identify attacks and their sources.

So that’s the tech argument for the acquisition, but the business proposition also interests me.

Foreground is a small company with just 165 employees. As Harrington explained it to me, the plan is to take Foreground’s tools and capabilities and give them a boost with Raytheon’s resources, including more research and development dollars and access to more customers and markets, Harrington said.

The fact that Foreground is already offering its solutions as a managed service along with professional services was a definite plus as well because more customers are asking for those kinds of offerings.

“We had been talking do we do build that piece organically or do we make an acquisition,” he said. “This gives us a jump start.”

And while Foreground is small relative to Raytheon, 165 people steeped in cyber is another plus. “You can never get enough people with those skills,” Harrington said. “That strengthens our bench.”

Foreground will become part of Raytheon’s Intelligence, Information and Services sector, and Harrington also explained why Foreground went to that part of the business and isn’t being folded into Raytheon Websense.

Websense was the business Raytheon bought in June for $1.9 billion to create a joint venture. Raytheon Websense is focused on software licensing and sales related to cybersecurity, while the cyber business in Raytheon ISS is about engineering services, professional services, incident response, vulnerability testing and other services, Harrington said.

And now, more managed services, thanks to the Foreground acquisition, he said.

Foreground is chock-full of young, talented cyber experts, Harrington said. “That’s why they’ve been successful,” he said.

Those kinds of workers are harder and harder to find for customers who have networks and data to protect but aren’t in the cybersecurity business, Harrington said.

Talented cyber experts want to work where cyber is their bread and butter, so for customers to get access to that kind of talent, they are increasingly looking to managed services offerings, he said.

“Customers are telling us all the time that they are looking to outsource that problem,” Harrington said.

Posted by Nick Wakeman on Oct 07, 2015 at 9:31 AM

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