Boeing to Exit Commercial Cybersecurity Business

By Danny Yadron and Doug Cameron 

Symantec Corp. is expanding its presence in the battle against corporate hackers through a deal with Boeing Co., after the aerospace-and-defense giant found it tough to win commercial deals in the fast-growing cybersecurity business.

Boeing and other defense contractors such as Lockheed Martin Corp. expanded their cyber offerings through dozens of small acquisitions over the past four years, aiming to leverage their prowess in protecting the Pentagon and their own servers through deals with banks, retailers and others being targeted by cyber thieves.

Symantec on Monday said it had acquired staff and technology licenses from the Narus Inc. business Boeing bought four years ago, hoping to use Narus's Internet-filtering technology to win commercial deals. Terms of the deal weren't disclosed.

"That just didn't materialize the way we thought it was going to," said Dewey Houck, vice president and general manager of Boeing's Electronic & Information Solutions division.

For Symantec, best known for its Norton Antivirus software, the deal is part of an effort to reinvent itself in a crowded and fragmented industry tackling a surge in high-profile breaches suffered by banks such as J.P. Morgan Chase & Co. and retailers including Target Corp.

Norton works like an immune system to block previously seen attacks. But Symantec acknowledges that antivirus programs are less effective against novel attacks.

Narus specializes in Internet-filtering software for intelligence agencies. The Wall Street Journal in 2013 reported that Narus developed technology used by the National Security Agency's surveillance systems.

Symantec Chief Technology Officer Amit Mital said the Narus engineers will examine the four trillion examples of malware Symantec has seen on customers' machines to develop better algorithms to spot skilled hackers. "People with these skills are very, very hard to find," Mr. Mital said.

Symantec shares have risen more than 35% since it fired its second chief executive in as many years, Steve Bennett, last March. Since then it has promised new products and said in October it would split into two firms--one for computer security and one for data storage.

Boeing bought Narus, which then employed 150, in 2010, one of several acquisitions in its push into cybersecurity. But executives had indicated in recent months that commercial markets were proving tough to crack.

Symantec said it interviewed more than 100 people from Narus and ultimately hired about 65.

Boeing's planned exit from part of its commercial cybersecurity business is the first since Chris Chadwick took over as head of its defense and space business a year ago and launched an internal restructuring. Boeing officials said the company will focus its cybersecurity efforts on military and government customers and protecting its own network.

Lockheed Martin has been the most optimistic among peers about commercial cyber opportunities, and last year bought Massachusetts-based Industrial Defender, which specializes in protecting critical infrastructure against cyberattacks. Lockheed has said its cyber business generates sales of around $1 billion a year, though it doesn't break this down between military and commercial clients.

Write to Danny Yadron at [e-mail] and Doug Cameron at [e-mail]

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