BT has bought privately-held network security firm Counterpane for an undisclosed sum. Speculation put the price as high as $40 million for the company, which had turnover of £20 million in 2004 and said it had assets of £6.8 million at that time.

Counterpane specialises in providing outsourced security services for monitoring networked applications, databases and hardware for attempted breaches.

The company operates three data centres in the US and Europe. It says it currently monitors 550 networks for Fortune 100 companies and recently said it had expanded its service to cover Microsoft and Oracle databases, SAP ERP applications and IBM mainframes.

BT sees the deal as a strategic move in its continuing move into professional services. Counterpane will run as a standalone operation until April 2007, before being integrated in to BT's Professional Services organisation.

Counterpane has some papers on security here, written by high profile founder and CTO Bruce Schneier, who also produces a monthly security bulletin

Schneier and CEO Paul Stich will remain at the company.