Cisco to buy UK web-security vendor ScanSafe

Cisco plans to acquire London-based security vendor ScanSafe in a $183m deal aimed at furthering its push into cloud computing and expanding its web security portfolio.

In its announcement on Tuesday, the California-based networking giant said it will pay for privately held ScanSafe in cash and retention-based incentives. It expects to close the deal in the second quarter of its fiscal year, which ends in January.

ScanSafe is a five-year-old provider of software-as-a-service (SaaS) web security, and that service will be integrated into Cisco's AnyConnect VPN client, Cisco said. The British security provider also has a worldwide network of carrier-grade datacentres and multi-tenant architecture that will be used for Cisco's cloud security services.

"With the acquisition of ScanSafe, Cisco is executing on our vision to build a borderless network security architecture that combines network and cloud-based services for advanced security enforcement," Tom Gillis, general manager of Cisco's Security Technology Business Unit, said in a statement.

Cisco said it expects the web security market to grow to $2.3bn (£1.4bn) by 2012. It has already invested $1bn in acquisitions, including the 2007 purchase of internet gateway security provider IronPort. On Tuesday, the company said it plans to match ScanSafe's SaaS web security with the Cisco IronPort web security appliance.

"By acquiring ScanSafe, Cisco is building on its successful acquisition of leading on-premise content security provider IronPort," it said.

ScanSafe is expected to become part of Cisco's Security Technology Business Unit when the deal closes. Cisco's Gillis and Eldar Tuvey, chief executive of ScanSafe, told ZDNet UK on Tuesday that there are no plans to relocate ScanSafe or drop any of its products. In addition, no job cuts are planned, and the acquisition should not affect ScanSafe's customers, they said.

"The initial reaction seems to be that there will be great benefits to our customers," said Tuvey. "Cisco has a fantastic reputation in networking and security, and together we can implement a number of exciting synergies which will really help to make our products more scaleable and seamless for the customer."

This deal and the purchase of Purewire by Barracuda Networks are signs of market consolidation in the SaaS market, according to Jay Chaudrhy, chief executive of security firm Zscaler. "The acquisition of Purewire and now ScanSafe by larger, more traditional security vendors further validates the market of the security-as-a-service model," he said.