Bytes buys CyberOne for £19.4m to bring security operations in-house
The software and services group adds a Microsoft security specialist with its own 24x7 operations center as Microsoft shifts partner rewards toward security, AI and CSP from October
- Half-year gross invoiced income: £1.6bn, up 19.6%
- Half-year gross profit: £97.1m, up 17.8%
- Half-year operating profit: £35.3m, up 6.6%
- CyberOne revenue: £9.5m in the 12 months to 31 July 2026
Once the deal completes, Bytes can sell a customer the Microsoft security license and run the managed detection service on it, collecting vendor incentives on one and recurring service fees on the other. Resellers still weighted to legacy products lose rebate income, and specialist Microsoft security providers look more like acquisition targets for larger licensing partners seeking the same capability.
“Security is where our customers’ budgets are increasing fastest, and we are adding further sales capacity in November to support continued growth into FY28 and beyond.”Sam Mudd, chief executive, Bytes Technology Group
Bytes Technology Group has agreed to buy CyberOne, a London-based managed security provider, for an initial £19.4m in cash, with performance-related payments of up to £18m more over the following 16 months. Contracts were exchanged on 9 October and the deal was announced on 13 October alongside Bytes’ results for the six months to 31 August 2026.
CyberOne was founded in 2005, employs more than 80 people, some of them in the Philippines, and is a Microsoft Security Elite Partner. It runs managed detection and response (MDR) from its own accredited security operations center. Bytes said around 90% of CyberOne’s income is recurring under multi-year contracts, and that the deal gives Bytes its own 24x7 security operations and reduces its reliance on third parties for that part of customers’ security needs. CyberOne’s leadership will run it as a standalone unit at first. Completion is expected by the end of October, subject to regulatory clearance.
The purchase comes as Microsoft’s next round of partner incentive changes takes effect in October. They reduce rebates on certain legacy products, increase rewards on growth products, including those carrying security and AI capability, and enhance the incentives on the Cloud Solution Provider (CSP) program. Bytes said it expects the changes to be positive for the group and has built them into the full-year guidance it upgraded on 17 September.
Bytes’ private sector gross profit as a share of invoiced income slipped to 12.2% from 12.5%, which the company put partly down to moving customers from direct enterprise agreements to indirect CSP billing, which it said is more profitable in absolute terms.
Sources
- Bytes Technology Group, “Acquisition of CyberOne”, RNS announcement, 13 October 2026. https://www.investegate.co.uk/announcement/rns/bytes-technology-group--byit/acquisition-of-cyberone-/9819095
- Bytes Technology Group, “Interim Results”, RNS announcement, 13 October 2026. https://www.investegate.co.uk/announcement/rns/bytes-technology-group--byit/interim-results/9819138
- IT Channel Oxygen, “Bytes Technology Group makes £19.6m acquisition as it hails ‘positive’ Microsoft incentive changes”, 13 October 2026. https://itchanneloxygen.com/bytes-technology-group-makes-19-6m-acquisition-as-it-hails-positive-microsoft-incentive-changes/
