Storage VAR Snags Security Startup

Solution provider GlassHouse Technologies is expanding into the security services business with the acquisition of one of its peers.

GlassHouse, a Framingham, Mass.-based IT consultant with a strong storage focus, on Monday said it acquired CSSG, a Chicago-based security services consultant.

The expansion into security services is in part being driven by customers of GlassHouse's data center consolidation and migration business, said Richard Scannell, senior vice president of corporate development and co-founder of GlassHouse.

And that business has grown quickly in the 18 months since GlassHouse acquired DCMI, a U.K.-based specialist in data center consolidation and migration, Scannell said.

Before the acquisition of DCMI and CSSG, GlassHouse's business was focused nearly exclusively on storage, Scannell said.

"The process of doing data center migration includes breaking down applications into smaller parts and moving them to new infrastructures," he said. "As we moved into this business, customers have been asking about our experience. The area most asked about is security, and how to keep data secure during the migrations."

Customers are also moving data closer and closer to the edge of their networks, including to mobile devices, Scannell said. "And as data gets mobile, having just a view of it from inside the data center is not enough," he said.

About 40 percent to 45 percent of GlassHouse's business comes from managed services, and the solution provider expects about 50 percent of its new security practice to also come from managed services, Scannell said.

However, he said, the company expects to roll its new security offerings into its existing core consulting clients first.

CSSG was self-funded as a startup in August 2008, said Robbie Higgins, co-founder of CSSG and now the vice president of security services for GlassHouse.

Higgins, who had been involved with professional and managed services at Motorola, started CSSG because he saw the need to bring security expertise to a wide range of customers. Motorola, on the other hand, tended to focus its services offerings on its own customer base.

Scannell and Higgins have known each other for about a dozen years and spent time together at Motorola, Scannell said. As a result, GlassHouse and CSSG had already collaborated on projects, and about six months ago GlassHouse decided to start talking to CSSG about an acquisition.

With the acquisition, which closed late last month, GlassHouse gains 12 employees, Scannell said. There were no outside investors involved, he said.

CSSG let GlassHouse get into the security market quickly not only because of its expertise but because of its small size, Scannell said. "We could have acquired a bigger company, but it would have taken longer to integrate," he said.

GlassHouse currently offers services at three levels, Scannell said.

The first is at the strategy level, which includes such services as how to build a disaster-recovery plan or how to become compliant. The second is at the integration level, including data storage backup, data center migration, upgrades and, now with CSSG, security. The third is managed services, which going forward will include security thanks to the CSSG acquisition, Scannell said.

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