SurfControl's Managed Services Move Paying Off

Security vendor SurfControl on Wednesday said its entry into the managed services market last year is paying off in the form of an earlier-than-expected profit.

In a preliminary financial report, SurfControl said its managed services revenue jumped 40 percent during its fiscal third quarter ended March 31. The managed services growth has enabled the company to realize a profit from the division three months earlier than expected, the report said.

The jump "reflects the higher levels of market demand for secure content solutions delivered via an on-demand service or an appliance, as compared to licensed software," according to a statement from SurfControl, a U.K.-based vendor with U.S. offices in Scotts Valley, Calif.

Last July, SurfControl added managed services to its portfolio with the $37 million acquisition of U.K.-based managed security vendor BlackSpider Technologies.

SurfControl's overall third-quarter revenue grew 24 percent to $32.67 million, compared with $26.4 million a year earlier.

Revenue via channel partners was 79 percent of sales during the third quarter, up from 67 percent in the year-ago quarter. Appliance sales grew 41 percent during the quarter, and software revenue grew 6 percent.

In December, SurfControl announced that it had been approached by an unnamed firm about a possible acquisition. In Wednesday's statement, SurfControl said "these discussions are continuing and may or may not lead to an offer." The company added that it would reveal the outcome of the discussions once they've been completed.

SurfControl, which trades on the London Stock Exchange, will officially report third quarter earnings on May 1.

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