Cisco to buy IronPort

5 Jan 2007

In a sign that fighting spam will be an important factor in IT for the coming year, Cisco has entered into a definitive agreement to acquire the email security company IronPort Systems for US$830m.

In a statement announcing the deal, Cisco, one of the world’s largest networking companies, said the importance of email and messaging systems to businesses makes IronPort’s security product range a natural fit with its own offerings. IronPort’s technology would complement Cisco’s own communications, policy control and management systems, it said.

IronPort has developed technology based around the concept of reputation filters, which examines the email sender’s record, blocking suspect addresses so that spam is stopped at the source before even arriving at its intended destination. According to reports, Cisco intends to use this information for routers and switches and firewalls in order to filter traffic.

Cisco’s Security Technology Group will take charge of the new acquisition once it is finalised. Richard Palmer, senior vice-president of the group, commented: “We feel there is enormous potential for enhanced email and message protection solutions to be integrated into the existing Cisco Self-Defending Network framework. 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.”

Under the terms of the agreement, Cisco expects to pay around US$830m in cash and stock for the privately held company, which is headquartered in California. The acquisition is expected to close over the next three months.

Cisco said it did not expect the deal would add to its bottom line in its current fiscal year, suggesting that, in the short term at least, it’s more about adding depth to its own security suite. As another indication of the importance of the spam issue, the IronPort deal is the fifth-largest transaction Cisco will have ever completed. The company has historically been one of the most acquisitive players in the IT networking industry.

By Gordon Smith