BT said Wednesday that it has acquired security firm Counterpane, started up by well known cryptographer and security guru Bruce Schneier, for an undisclosed sum.

The California-based firm provides managed networked security services to around 550 networks worldwide including multinational and Fortune 100 customers.

Post acquisition, Schneier will continue in his role as CTO and Paul Stich will remain its CEO.

Commenting on the acquisition, Dustin Kehoe, senior analyst in the Telecom Services Central Europe division of analyst firm Current Analysis, said the move will allow BT to hit back at some critics with an improved security focus in the areas of network security monitoring.

“This comes at a time when carriers and system integrators alike are attempting to increase their security expertise and are acquiring managed security providers. BT can now leverage its own in-house capabilities and can now bid more competitively on areas of security and rely much less on external partners,” said Kehoe.

The analyst also believes the move is likely to have a knock on effect on the industry. “The Counterpane acquisition will force the hand of major pan-European competitors, especially if BT can successfully bid and win on its own more often than not. With security being one of the fastest growing areas, carriers must either acquire like-companies or to intensify relations with external partners to win,” Kehoe said.