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Cisco buys IronPort for US$830M

Analysts have welcomed the news that Cisco has splashed out on Internet gateway security company IronPort.
Written by Tom Espiner, Contributor

Cisco has acquired Internet gateway security company IronPort for US$830 million.

Cisco plans to expand its product range by integrating technologies from IronPort that complement its existing switch and router product lines, especially Cisco network access control (NAC), which uses the systems' infrastructure to enforce security policy for all devices seeking to access the network.

"We feel there is enormous potential for enhanced e-mail and message protection solutions to be integrated into the existing Cisco self-defending network framework [NAC]," said Richard Palmer, senior vice president of Cisco's Security Technology Group, in a statement.

"Using the network as a flexible platform to integrate IronPort's technologies, Cisco will be able to build new security applications as customers' demands evolve," Palmer said.

Cisco is paying a combination of cash and stock, and the deal is expected to close in the fiscal third quarter of 2007. The acquisition is subject to various standard closing conditions.

IronPort, which sells e-mail security appliances that filter e-mail by sender reputation, as well as web security and security management products, will become a Cisco unit. Upon close of the transaction, the IronPort team and product portfolio will operate as a business unit in Cisco's Security Technology Group, reporting to Richard Palmer.

Analysts see the acquisition as a positive step. Peter Firstbrook, research director at Gartner, said that both companies will benefit. Cisco will get a sender-based e-mail reputation platform, while IronPort plans to expand its reputation based approach into the IP reputation of Web server traffic.

"Absolutely it's a positive move for both companies," said Firstbrook. "IronPort gets Cisco customers to sell to, which opens up a strong channel for them."

Rachel Brindley of Canalys said that Cisco would also benefit from selling to IronPort customers, as it gives them a presence in the specialist security distribution community.

Brindley said that IronPort would also benefit from being part of a larger organization because of the ongoing consolidation of the security market.

"There have been so many acquisitions in the security space--IBM and ISS, EMC and RSA--that it's difficult for smaller security vendors not to have a wider portfolio. Security vendors with a single solution will find it difficult to generate as a long-term value proposition," said Brindley.

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