Monday 16 September 2019

BT's IT arm in cybersecurity pivot

 

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Stock image

Thomas Seal

BT Group is pinning the future of its IT business on cybersecurity in a tactical retreat from storage and cloud services, where the former UK phone monopoly has been supplanted by the likes of Amazon, Microsoft and Alphabet.

The majority of investments at BT's Global Services are now going to protecting a client roster of corporations and governments from hackers, unit head Bas Burger said.

"They are better at that stuff than we were, so we don't participate any more in those spaces," Mr Burger said of the Silicon Valley giants that now dominate data storage and cloud hosting.

He has his work cut out for him. Global Services contributes a fifth of BT sales, but just 6pc of earnings, and it's struggled as customers increasingly abandon legacy telecommunications technologies. The 17,000-person division is now bearing the brunt of the 13,000 job cuts outgoing BT CEO Gavin Patterson instigated in May. Global Services has shrunk by about 800 people since then.

Analysts have speculated Global Services could be sold off entirely to help focus the sprawling carrier and pay down extensive costs, including a large pension deficit. But the division has strategic importance in helping BT stay linked with global multinationals, which makes it hard to remove, said Burger.

Bloomberg

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