Neustar Acquisition of Verisign Businesses Signals Further Consolidation Among Legacy Enterprise DNS Providers

Kris Beevers Headshot
Kris Beevers
November 6, 2018

A little over a week ago, Neustar announced its acquisition of Verisign’s security services unit, including Verisign’s managed DNS contracts, along with other contracts for recursive DNS, DDoS mitigation, and WAF services.  Many customers, partners, and observers in the DNS space have asked for NS1’s thoughts on the acquisition.

We’ve seen a large shift in the market dynamics of the DNS and traffic management ecosystem over the last few years — the acquisition of Dyn by Oracle, the sales of Neustar, Infoblox, and Bluecat to private equity buyers, the exit of Cedexis to Citrix — and now this consolidation of Neustar and Verisign’s security services units under a shared private equity owned umbrella.

The basic pattern in all of these transactions is a continued trend toward consolidation and margin optimization of legacy businesses in the enterprise class DNS ecosystem.  Most of the M&A activity over the last several years involves late stage businesses with technologies built in a world fundamentally different from today’s internet and enterprise environments.  As we see in many industries, when the needs in the market shift, and the velocity of legacy businesses slips, growth of these legacy businesses comes through consolidation rather than building new, high impact products for their customers, and the internal focus shifts toward financial belt-tightening, away from product innovation and customer success.

That’s exactly what we’re seeing with Neustar’s acquisition of Verisign’s security services contracts: one legacy business growing inorganically by acquiring the contracts of another.

Verisign and Neustar customers will ultimately use this occasion to reconsider their DNS and traffic management strategies, along a few lines:

  1. Customers of both Neustar and Verisign with a redundant managed DNS setup are in a dangerous spot, because they are losing their redundancy. DNS redundancy is a vital application availability and resiliency safeguard.   Many major internet properties and financial institutions are at risk as a result, and these companies will need to adjust their approach or become vulnerable.
  2. All Verisign customers will be forced to make a technology transition in the next few months.  They’ll need to decide if it is worth exerting the effort to transition from one legacy platform to another, or whether now is the time to unlock the potential of DNS with a proven, modern platform.
  3. Neustar customers will read between the lines and recognize the indication that their provider will pursue the market not through product innovation and organic adoption, but through M&A and financial optimization.  They too will ultimately need to decide if they should continue to invest in critical path technologies that their provider is not investing in, or if it’s time for a change.

There are companies innovating in the DNS ecosystem today.  NS1 is leading the charge, and we’re investing hard in innovations to move the way DNS is used to orchestrate and deliver today’s internet and enterprise applications.  We’re already working with many customers impacted by the Neustar + Verisign consolidation to transition from legacy DNS setups and upgrade to modern DNS for their applications, moving their initiatives in security, reliability, performance, and automation dramatically ahead.  Contact us today and we’ll help turn this frustrating distraction into a technology opportunity instead.

Back to All Blog Posts

Request a Demo

Contact Us

Get Pricing