Orange seeks cybersecurity M&A to profit from Wannacry threat

PARIS: Orange SA is seeking more acquisitions in cybersecurity to bolster its technology-services offerings and capitalise on a surge in interest from corporate clients after a global ransomware attack last month.

The Paris-based former phone monopoly bought European threat-intelligence specialist Lexsi last year and is now looking for candidates that can drive growth in markets such as Spain and Belgium, said Michel Van Den Berghe, head of Orange Cyberdefence. The company is targeting cybersecurity providers with several hundred employees and busi- ness across multiple countries, he said in an interview.

IT divisions at carriers from Orange to Deutsche Telekom AG are accelerating a push into cybersecurity to spur revenue growth and counter a shift to cloud computing that’s sucking business away from their computer-services operations. The move into security puts the phone companies in direct competition with more traditional IT players such as Atos SE – but they see an opportunity with events such as the WannaCry attack last month that have stoked customer interest.

“We are looking to expand through external growth,” Van Den Berghe said. “We want to become the European leader.”

About 70% of French companies are still relying on internal networks, though more and more are opening up to the web, Van Den Berghe said, pointing to the size of the market.

With revenue from calls and mobile data stalling, phone carriers are looking up and down their operations for ways to spur growth, from banking to entertainment to the IT-services divisions that provide dedicated computer networks and outsourcing. Orange targets annual sales growth of more than 10% in cybersecurity, a rate which would outpace the market’s projected 8% to 9% expansion.

Last month’s malware campaign known as WannaCry has helped to convince more top executives that cybercrime is a real threat, Van Den Berghe said. The attack affected more than 200,000 computers in at least 150 countries, locking users out of systems at Chinese government agencies, Deutsche Bahn, automakers Nissan Motor Co and Renault, logistics giant FedEx Corp and hospitals around the world.