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Cisco gobbles IronPort (and Adam hates spam)
Bubbleicious! It's IT Blogwatch, in which Cisco buys IronPort. Not to mention how Adam Golebiowski got his own back on a spammer...
Let's hear it from Nancy Gohring (special: with fried egg):
Cisco Systems Inc. today said it has agreed to buy IronPort Systems Inc., a developer of e-mail and Web security products, for $830 million. IronPort offers a range of appliances that companies use to protect their networks from Internet threats, such as spam and spyware. Its appliances also help secure e-mail services for Internet service providers.
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The networking company plans to integrate IronPort's e-mail and message protection technologies into its Self-Defending Network framework. In addition to messaging security products, IronPort also sells a security management appliance that offers enterprises a single location to manage, store and monitor corporate policies.
Your humble blogwatcher breathlessly broke the news:
Cisco is of course well-known for its "growth by acquisition" strategy, and was notably lacking in solutions for email hygiene. It makes sense for it to buy an appliance vendor.IronPort and Ciphertrust have been the appliance market leaders for some time (albeit challenged by the appliances launched by large, conventional software vendors such as Sophos and Symantec). Ciphertrust was of course bought by Secure Computing in 2006, thus leaving Cisco with an obvious choice. Will we look back at 2007 as the year of spam control market consolidation? We've certainly seen some significant M&A activity in previous years, but there's still plenty of scope for your vendor to be acquired or run out of VC money.
Alan Shimel has visions of a Borg supermarket sweep:
Cisco continues its trip down the M&A supermarket aisle, dropping companies into the basket ... this is actually a pretty big acquisition for Cisco, probably bigger than they have done before in security. IronPort touts itself as a security appliance vendor and sells a spam blocker box that is a hardened appliance. Frankly, I think their real value is in the database they maintain of a white list of ISP's and mailers. IronPort licenses that database to open source users. I wonder how long that will last once Cisco holds the keys.I think this will signal a land grab in the anti-spam business. Look for something with Barracuda, Postini and some of the other anti-spam crowd. Consolidation will continue in security and we will all be assimilated. Resistance is futile.
Martin McKeay agrees with Alan and YHB:
Good point, the database IronPort owns may be more important than the technology they provide. Quite frankly, the technology itself is pretty mature. Most of the anti-spam vendors do the same thing, even if there's a slight variation in their heuristics or blocking technology. Collecting the database of legitimate mail servers is the hard part, since it has to be continually updated if it's to retain any value.
2007, the year of security company consolidation. Which will probably lead to 2008, the year of new startups hoping to be purchased in 2009. The cycle continues.
Is this deal a sign that Cisco has its big “check book” out again? As a backstory, [IronPort] raised over $100 million in venture funding. The buyout today is still more cash in the pockets of Peter Thiel and Max Levchin and ex Hotmail-ers Sabeer Bhatia and Jack Smith who were amongst the individual investors who participated in the initial round of funding.
Cisco's offer should make the investors happy. It's a fair and good price. It should also stimulate strong IronPort growth ... Despite having good technology, [IronPort] has consistently had difficulty achieving and maintaining profitability. We estimate IronPort's revenues have hovered around in the $50M-$75M mark for some time, which must have been frustrating for investors. IronPort has 408 employees.IronPort had hoped to go public over the last couple of years; given its financial performance, the acquisition route makes much better sense.
Alex Eckelberry gives Cisco the clap:
I applaud this decision. It makes sense for them to move into email and web security (not known to many is that IronPort recently launched a web filtering appliance) ... Now the issue that Cisco will need to decide upon is whether they want to move downmarket: IronPort has extraordinary presence in the Global 2000 with their high-end systems, but other vendors (notably Barracuda) have a stronghold in the SMB channel.
Buffer overflow:
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Previously in IT Blogwatch
And finally... The Tale of a Spam
Richi Jennings is an independent technology and marketing consultant, specializing in email, blogging, Linux, and computer security. A 20 year, cross-functional IT veteran, he is also an analyst at Ferris Research. Contact Richi at blogwatch@richi.co.uk. Wow, belt feels looser today.
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