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# Bytes says security is where its customers' budgets grow fastest, so it is buying a cyber security firm
- URL: https://www.businessbagel.com/bytes-cyberone-security-budgets-acquisition/
- Published: 2026-10-15T02:30:00.000Z
- Updated: 2026-10-15T02:29:59.000Z
- Description: The UK software seller, also listed on the JSE, has agreed to buy London's CyberOne and run its own round-the-clock security desk, after a half in which services grew faster than anything else it sells.
- Author: Christian Maidman
- Tags: Companies, Business Bagel News

When a company that sells other people's software starts buying the people who guard it, it is following its customers' money. Bytes Technology Group resells Microsoft and other software to businesses and public bodies in the UK and Ireland, and it has agreed to buy CyberOne, a London cyber security firm. Chief executive Sam Mudd gave the reason in the results announcement: security is where customers' budgets are increasing fastest.

CyberOne runs a security operations centre, the desk that watches a customer's systems day and night and steps in when something goes wrong. It is built on Microsoft technology, the supplier behind about half of Bytes' gross profit, employs more than 80 people across the UK and the Philippines, and around 90% of what it earns comes back every year under multi-year contracts. Until now Bytes has leaned on outside firms for that part of the job. Owning CyberOne gives it a 24-hour desk for private-sector customers, next to the one its Phoenix business already runs for the public sector.

## What Bytes is paying, and when it pays off

Bytes is paying £19.4 million upfront, all of it from cash it already had, with up to £18 million more over the next 16 months if CyberOne performs. In the year to July, CyberOne brought in £9.5 million of revenue, growing at what Bytes calls a high double-digit pace. Contracts were exchanged on 9 October, but the deal still needs clearance under the UK's National Security and Investment Act, which Bytes expects by the end of the month.

Shareholders should not look for it in this year's numbers. Bytes has left CyberOne out of its forecasts, because the accounting cost of what it bought is expected to cancel out the profit it adds, and it only pencils in a boost to earnings per share in its 2028 financial year.

## Services grew fastest in the half

The deal landed alongside half-year results that ran ahead of what Bytes itself expected, for a company Business Day values at R22.05 billion on the JSE, where it has a secondary listing. Everything customers paid through Bytes rose 19.6%. Services were the fastest-growing slice, up 41%, though hardware nearly kept pace. Profit grew more slowly than sales because bonuses and other costs went back to normal, and earnings per share rose about 6%, helped by buybacks that left fewer shares to divide the profit among.

Bytes is adding more salespeople in November, and if clearance arrives on time it will be selling its own security desk by the end of October to customers who, by Mudd's account, are already spending more on exactly that.