Behind Verizon’s Acquisition of Niddel



Automated threat hunting

In January, Verizon (VZ) acquired Niddel but didn’t disclose the financial details of the deal. Niddel, based in San Mateo, California, is a provider of so-called anonymous threat detection. It develops software for threat hunting. Niddel’s Magnet software offers machine-learning-based automated threat hunting.

“Using machine learning to improve information accuracy significantly reduces false positives and significantly improves our detection and response capabilities,” Alexander Schlager, Verizon’s executive director for security services, said in a statement.

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A $33.7 billion revenue opportunity

Verizon acquired Niddel to strengthen its portfolio of managed security services for enterprise customers. Therefore, Verizon said that it would integrate Niddel’s advanced technology and services into its existing products.

MarketsandMarkets predicts that the global managed security services market will expand at an annual rate of 14.6% between 2016 and 2021. Therefore, the managed security services market is expected to grow to $33.7 billion by 2021. The market was estimated at $17 billion in 2016.

Diversifying revenue streams

Verizon’s acquisition of Niddel can be understood in the context of the company stepping up its campaigns for managed services revenues as it also works to diversify its revenue sources and stimulate growth. For this reason, Verizon spent nearly $10 billion between 2015 and 2017 to acquire AOL and Yahoo assets to bolster its share in the digital media and advertising market.

Verizon rivals such as AT&T (T), T-Mobile (TMUS), and Sprint (S) also are buying media assets or partnering with media companies as they look to enhance their existing products and launch new revenue-generating initiatives. AT&T agreed to acquire CNN parent Time Warner (TWX) for $85.4 billion as part of its media push.


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