High Wire Networks Becomes Pure-Play, Channel-Focused MSSP

High Wire Networks has sold its technology enablement services business to ServicePoint, and plans to sell Secure Voice Corporation (SVC), its VoIP and data network services subsidiary.

ServicePoint, a provider of technology infrastructure services, bought the technology enablement services business in an all-cash deal. High Wire Networks has a tentative sales agreement in place for SVC, which it acquired in 2021.

The technology enablement services business transaction is valued at $11.2 million. The proceeds from the transaction will be used to reduce High Wire Networks’ overall debt by about $5 million. The company has transitioned its remaining debt of $1.6 million into more favorable terms, allowing more cash to remain on the balance sheet.

Managed Cybersecurity Best Growth Opportunity for High Wire Networks

Stephen LaMarche, High Wire Networks’ COO, said there wasn’t a need to sell the technology enablement services business, but the time was right.

High Wire Networks' Stephen LaMarche

“We had known for a while that the Overwatch managed cybersecurity business represented the best opportunity for growth and was the future of our company,” he said. “We directed as much investment of time and capital as we could into Overwatch while also managing the technology enablement services business. Our team did a great job of this balancing act. We were able to grow the revenue and profitability of the tech-enablement business to a point where it made sense to sell it and then commit all our energy, investment and working capital to Overwatch.”

High Wire Networks offers its Overwatch managed security services exclusively through a global network of MSPs and MSSPs totaling more than 230 worldwide.

High Wire Networks is “excited” to focus all of its attention and investment capital on improving the value it provides to its partners and their customers, LaMarche said.

“We will commit more to co-marketing funds, lead-generation programs and sales resources to help our partners grow revenues,” he said. “We will implement streamlined systems for quoting, order processing and reporting. Most importantly, we will continue to advance our industry-leading cybersecurity platform and tools to give our partners confidence that their customers’ systems and resources are protected.”

TCV Reaches All-Time High

For the first quarter of 2024, High Wire Networks reported the total contract value (TCV) for Overwatch reached a record $10.4 million, up 104% from $5.1 million at the end of the year-ago quarter. Overwatch recurring revenue is currently tracking at more than $5 million on an annualized basis, up by more than 25% compared to the full year of 2023.

“We think this winning recipe is driven by our channel-only strategy,” LaMarche said. “We work hard to support our partners and help them grow their cybersecurity practices. Our services are not one-size-fits-all. They are designed to be flexible and meet our partners where they are with their existing services and tech stack. We can integrate their existing cyber tools into our services and then help fill any gaps to expand their suite of services to grow revenue and better protect their customers. We also invest in co-marketing dollars to help them grow their sales pipeline to drive top-line revenue and profitable service delivery.“

Under the more streamlined structure, the company believes it can also better scale and potentially double again the TCV of its managed cybersecurity services over the near term. The company’s pipeline of managed cybersecurity engagements continues to strengthen, driven by the signing of several new large-scale partners and GSIs.

Competitive Advantage

“We think our Overwatch Security Orchestration, Automation and Response (SOAR) system already gives us a significant advantage in how we deliver positive outcomes for our partners and their customers,” LaMarche said. “The sale of the tech enablement services business provides significant capital to invest in technology and systems to continue the evolution of how we leverage AI and machine learning (ML) to maximize the efficiency of our security operations center (SOC) and our cyber engineering staff to stay ahead of ever-evolving threats.”

The company recently appointed Edward Vasko as strategic advisor to help accelerate the growth and development of Overwatch. Vasko brings more than 30 years of experience and entrepreneurial success in the cybersecurity industry, including business formation, driving growth, and leading M&As and exits. He is expected to join the company full time after completing the transition from his current position as director of Boise State University’s Institute of Pervasive Cybersecurity.