WatchGuard Technologies Inc., the maker of integrated threat management software, appliances and services, today said it has acquired ActZero Inc., a managed detection and response services provider for an undisclosed amount.

WatchGuard said the deal would accelerate its expansion into the MDR market, which began in 2023. Both companies primarily serve managed service providers, which resell the service to their customers.

ActZero’s technology and people will be the foundation of the WatchGuard MDR product line. WatchGuard plans to fold its MDR offerings into ActZero’s but said the integration should not affect customers.

“Typically we acquire companies to integrate into our platform. This is a reverse integration,” said WatchGuard Chief Executive Prakash Panjwani. “We’ll integrate into their platform within the first 90 days so partners can leverage it immediately.”

ActZero has focused solely on the MDR market since its founding in 2019. The company raised more than $40 million, according to the market intelligence service Crunchbase Inc. Panjwani said the acquired company is known for having strong customer onboarding and service capabilities and that its platform effectively uses machine learning to reduce false positives and noise.

“They’re mature with services around processes, people and the platform,” he said. “They bring that maturity directly to us.” WatchGuard had been building its own MDR business “organically and this moves us ahead.”

Panjwani also praised ActZero’s open architecture, which enables integration with endpoint detection and response software from CrowdStrike Holdings Inc. and Microsoft Corp. That strategy was in line with WatchGuard’s. “We would have definitely opened up our MDR service,” Panjwani said. “They get us there 24 months earlier.”

ActZero’s focus on MSPs was another attractive selling point, Panjwani said. Unlike enterprises, MSPs typically sell security services to a large number of small and midsize customers. “Automation and scalability are critical because they’re dealing with so many users,” he said.

So is consistency. MDR providers that communicate directly with end users create headaches for service providers. “A lot of the traditional MDR players go directly to the end user,” the CEO said. “We make it very clear that the partner owns the end user and we are working on their behalf.”

This is WatchGuard’s ninth acquisition and its sixth since 2016. Founded in 1996, the company went public in 1999 but struggled with product and marketing execution.

It was acquired by private equity firms Vector Capital Management L.P. and Francisco Partners Management L.P. in 2006, which installed new management. Vector Capital acquire majority ownership in 2022. The company claims more than 17,000 MSP customers and says it has sold nearly 1 million multifunction threat management appliances worldwide.

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