Earlier this year Verano bought Plantdata, a SCADA Security consulting company. Yesterday they purchased e-DMZ, a company that positions itself as a Managed Security Services Provider (MSSP) but also did quite a few installs of security systems. This is interesting for two reasons:

1) In March, Verano announced an alliance with Counterpane, the first MSSP and still a big name in the industry. Was the alliance so wildly successful or did it show significant potential that Verano decided to get in the business? Did Counterpane not provide the service required in control systems or the expected business prospects?

I asked Lori Dustin, VP of Marketing at Verano, these questions and got some answers via some voicemail exchanges:

“No we were not dissatisfied with the Counterpane relationship. In fact, we have joint customers. e-DMZ is completely focused on the real time environment. We wanted that focus and a resource we could completely control in the real time environment . . . and offer the full SCADA security lifecycle from assessments to technology deployment to management in the real time control environment. We will still maintain our Counterpane relationship.”

I think it is unlikely the Counterpane relationship will continue as they are now direct competitors despite the appropriate polite talk.

2) Verano is really making a statement this year with these two purchases and internal development. They were the first and still one of the few companies to come out with a security product that was specifically aimed at the SCADA/DCS market. They now are the only SCADA product vendor, that I’m aware of, that has a MSSP. The consulting arm, a competitor to Digital Bond, has a reputation and long track record in the industry.

This can be a potent combination, but it is not easy to pull off. Ask McAfee who tried it a few years back when they were Network Associates. Or Symantec who has tried this the last three years with more success. The challenge is the consulting business model is different than the product business model which is different from the MSSP business model. Many MSSP’s have consulting arms that struggle; consulting companies that come up with products are often a disaster; business requires focus and it is hard to focus and prioritize focus on multiple business models. It requires a stellar and deep management team at top and mid levels.

So my short take is this makes a lot of strategic sense for Verano, but may be harder to pull off then anticipated. It will be interesting to watch.