Qualys has signed a letter of intent to purchase one of its channel partners to increase its visibility in the military, national security and federal government arenas.
The Foster City, Calif.-based cloud security vendor said its planned acquisition of Arlington Va.-based Second Front Systems would provide Qualys with more domain expertise around building and delivering cybersecurity offerings tailored for the defense, intelligence, and law enforcement communities.
Second Front provides advisory services and cybersecurity offerings to government agencies addressing national security needs, including those dealing with classified information, according to Qualys chairman and CEO Philippe Courtot. The Second Front team has expertise helping federal agencies build state-of-the-art cybersecurity capabilities as they embark upon their digitization efforts, Courtot said.
"We're very serious about the federal business," Courtot told CRN. ""We have everything the federal market needs – scale, accuracy, and immediacy."
Courtot said Second Front has a superb team, and will be actively soliciting partners in the U.S. government space to better address the needs of the federal market. With capabilities on-premise, in the cloud, on the endpoint, and – starting in early 2019 – on mobile devices, Courtot said Qualys is well-positioned to address the needs of federal customers.
Second Front provides advisory services to technology companies seeking to inject their product or offering into the national security market, leveraging proof-of-concept pilots, lightweight systems integration, and a range of contracting vehicles, according to the company's LinkedIn page.
The company's partners are typically both venture-backed and commercial proven, and have often received investments from organizations like the CIA's venture capital firm, In-Q-Tel as well as the Army Venture Capital Initiative, and DARPA, according to its LinkedIn page. In addition to its Washington D.C.-area offices, Second Front has operations in both Silicon Valley and Chicago.
Second Front has been delivering security capabilities to federal agencies using the Qualys Gov Platform, which has been identifying, detecting, protecting, and responding to cyber threats while helping customers meet regulatory and compliance requirements and protect digital transformation efforts. The Gov Platform has been FedRAMP authorized since 2016.
The terms of the letter of intent for the proposed acquisition are non-binding, and Qualys and Second Front would need to negotiate and enter into definitive agreements before proceeding with the proposal. If the parties come to an agreement, Qualys would expect the deal to close in the second half of this year, with Second Front operating as an independent subsidiary within Qualys' federal division.
Qualys' stock climbed more than 2 percent to $79.85 in trading Monday, with the proposed Second Front acquisition announced before the market opened. Terms of the deal were not disclosed.
Second Front was founded in 2014 and employs between two and 10 people, according to LinkedIn. The company was founded and has been led by Peter Dixon, a major in the U.S. Marine Corps who previously worked at risk-based authentication provider ThreatMetrix and the U.S. State Department.
Meanwhile, two high-profile generals – Peter Pace, chairman of the joint chiefs of staff from 2005 to 2007; and Stanley McChrystal, commander of the International security assistance force in 2009 and 2010 – sit on Second Front's board of directors.
This is Qualys' third acquisition in recent months. The company bought Singapore-based 1Mobility in April to extend the power of its cloud-based security and compliance platform to millions of mobile and IoT devices.
Five months earlier, Qualys purchased Reston, Va.-based startup NetWatcher, which provides businesses with a real-time view of potential security vulnerabilities such as weak passwords, unsafe behavior and outdated software.