Kudelski Expands Further Through Acquisition of M&S Technologies

Kudelski Group, the Swiss content security and pay TV software provider, has continued its spate of acquisitions by buying Dallas-based M&S Technologies, a supplier of enterprise IT security technology and services, for an undisclosed sum. The move consolidates the group’s fledgling presence in the US while also expanding into the enterprise security arena.

The group to date has been mostly European-centric during its 65-year history, starting in media recording before edging into digital TV software through various acquisitions in the 1990s and noughties, notably Open TV in 2007 for multiscreen pay TV middleware. A radical refocusing came in 2012 with the launch of Kudelski Security, which now dominates the group’s activities, setting the stage for the recent acquisitions. One of the biggest in March 2014 was the purchase of Oslo, Norway, based Conax from Telenor Broadcast for €164 million. This gave Kudelski a substantial presence in some non-European markets such as Latin America, while fleshing out its multiscreen content security portfolio, especially in the OTT area with some pre-embedded solutions for Android clients for example.

Yet the July 2016 acquisition of Civolution’s forensic watermarking business with the purchase of NexGuard Labs could be seen as even more significant given the rapid rise of watermarking technology for protecting premium content, including live sports as well as blockbuster movies and increasingly top TV series. Kudelski had previously spurned watermarking and so had little choice but to buy in the technology in the hope of closing the gap on leaders in that area such as Verimatrix.

Two months earlier in May 2016 Kudelski had acquired Milestone Systems, based in Minneapolis USA, strengthening its enterprise security portfolio and taking its first significant step into North America as part of its bid to become a global all round cyber security player. The acquisition just announced of Dallas based M&S Technologies is a further move in both those directions, since that company is well entrenched in the USA enterprise security field. It has 46 employees, some Fortune 2000 customers and security partnerships with specialists in the field including McAfee, Juniper, Fortinet and Sophos.

While there is no doubt Kudelski has acquired scale, there is the risk that focus on the core content security business can be lost amid such rapid expansion through acquisition, although similar fears were expressed over the fate of NDS after its purchase by Cisco for $5 billion in 2012. In that case the NDS identity quickly became absorbed into the VideoGuard brand. Cisco has held onto most major accounts gained by NDS, such as Sky and DirecTV and in some cases extended the partnership into OTT extensions. Cisco has also enjoyed some success pitching VideoGuard as part of a complete infrastructure package, which the other content security vendors can only do through partnerships.

However, Cisco itself, like Kudelski, has had to partner to develop effective protection against live stream piracy through forensic watermarking. Here it is collaborating with UK based Friend MTS which provides pirate monitoring to feed Cisco’s Streaming Piracy Prevention (SPP) service, which in turn relies on third party forensic watermarking to identify the subscriptions or sessions used to source the content. The system can then shut down the source through the video security system in near real-time. According to Cisco the process is fully automated and enables responses to piracy incidents before recipients of illicit streams have had time to watch much of the event in question. The idea is that bears down on revenue theft.

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