Xerox Unit Farms Out Security in $20M Deal

BOSTON (06/02/2000) - Xerox Europe, the European arm of Stamford, Connecticut-based Xerox Corp., has signed a five-year, US$20 million managed security services contract with Axent Technologies Inc. to secure Xerox's mobile workforce and its digital business initiatives.

Beginning this year with several thousand users, Rockville, Maryland-based Axent, together with its subsidiary Secure Network Consulting Inc., will create an electronic security framework and service agreement that is expected to serve up to 100,000 Xerox customers and employees by mid-2002.

Xerox Europe, which had revenue of $5.3 billion last year and employs 18,500 people, is expected to save $20 million per year using its parent company's eCommerce secure electronic trading environment. The Axent deal will enable this use.

Increasing corporate initiatives for online commerce systems - combined with recent attacks on e-commerce sites and a shortage of trained security managers - has pushed the demand for outsourced security services.

David Tapper, an analyst at Framingham, Massachusetts-based International Data Corp., estimates that the market for security consulting should reach $14.8 billion by 2003, up from $6.2 billion last year.

Security Is Part of Reinvention

Managed security is a key part of Xerox's plan to reinvent itself from an analog copier business to a digital document and information technology company, according to Jim Lawler, senior director and general manager of Xpress, Xerox Europe's purchasing group. He said Axent's managed security services are the cornerstone of Xerox's plans to move its mobile European workforce, its field service engineers and its business-critical processes to the Internet.

"What Xerox is trying to do is create a seamless digital environment for customers, employers and suppliers," said Lawler. "Axent offered the best value for the money as well as robustness of environment."

Xerox plans to integrate the Axent security services into its eProcurement and eCommerce initiatives, which the company said will improve customer service, exchange orders from thousands of partners and automate manual legacy processes. Axent will gather information about Xerox's business practices and information management and dovetail those in industry parameters and technical protocols. The system will extend from the customer's gateway into the Xerox network.

Lawler said Axent also offers a deeper understanding of European technical standards, enterprise resource planning systems, encryption and privacy regulations essential for his business.

Outsourcing Trend

Steve Hunt, an analyst at Giga Information Group Inc. in Park Ridge, Illinois, said Axent is joining the ranks of security product vendors who have recently announced that they will offer security services through outsourcing deals.

Others include Internet Security Systems Inc., Network Associates Inc., Aventail Corp. and Counterpane Internet Security Inc., he said.

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