Incident Response, Network Security, TDR

Endace buys MSSP Applied Watch for $5 million

New Zealand-based network monitoring provider Endace has acquired Applied Watch Technologies, a managed security services provider, for $5 million.

Endace had provided Applied Watch with $500,000 in working capital, and will issue an initial cash consideration of $3.9 million upon the deal's completion.

Crystal Lake, Ill.-based Applied Watch lost $112,000 last year, despite revenues of $1.5 million. As of Sept. 30, Applied Watch, which also provides centralized management tools for open-source products, had net liabilities of $376,000, according to Endace.

Stephen Gleave, VP of marketing at Endace, told today that the acquisition will help the company take advantage of an increase in corporate use of open-source products.

“So what we hope to achieve is securing open source, and having a centralized managed place for that software to run,” he said.

Representatives from Applied Watch could not immediately be reached for comment.

Kelly Kavanagh, Gartner principal research analyst, told today that the acquisition signals that Endace is trying to gain a foothold in the United States.

“They have most of their business in these appliances to run Snort and do network monitoring, so certainly the Applied Watch acquisition gives them a footprint in the U.S., which is not insignificant,” he said. “It seems like a reasonable move. The price didn't seem outrageous, and the important thing for doing managed services is to have that local footprint – in the U.S., in this case.”

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