Cisco coughs $2.7bn for Sourcefire
Gorges on intrusion prevention tech player
Cisco has dug deep and found $2.7bn for intrusion prevention security player Sourcefire.
Sourcefire started out in intrusion detection/intrusion prevention but expanded over the years to add next-generation firewall and advanced malware protection wares to its portfolio.
Cisco reckons the acquisition will accelerate the delivery of its security strategy of "defending, discovering, and remediating the most critical threats".
It also claimed industry developments such as mobility, the cloud and extending net connectivity to a vast new range of devices (the so-called 'Internet of Everything') are changing the security landscape, forcing a new approach that the Cisco /Sourcefire combo hopes to bring to the table.
"Traditional disparate products [are] insufficient to protect organizations from dynamic threats," Cisco claimed.
The duo hope to offer "advanced security threat protection across the entire attack continuum and from any device to any cloud".
The deal is the biggest in the information security industry since Intel bought McAfee three years ago for $7.68 billion.
Under the terms of the deal, Cisco is offering $76 per share in cash in exchange for each share of Sourcefire, a premium of around 28 per cent on Monday's closing price of $59.08.
Sourcefire was founded by Martin Roesch, the creator of Snort, a popular open-source intrusion detection engine, back in 2001. The firm previously accepted a $225 million takeover bid from Check Point way back in 2005 but the Israeli firm withdrew its offer after it became clear the US legislators were lining up to block the acquisition. Sourcefire's technology played a key part in protecting US infrastructure systems and US politicians were wary about seeing control of this technology passing over to an Israeli firm.
Two years later, Sourcefire went public raising $86.3 million in the process. Sourcefire rejected a $187 million offer from security and storage appliance vendor Barracuda Networks in May 2008.
For year ending 31 December 2012, Sourcefire reported revenue of $223.1 million, an increase of 35 per cent year-on-year. The company is based in Columbia, MD and employs 650 people worldwide.
Cisco's acquisition of Sourcefire gives it extra ammunition in its fight against competitors such as Check Point, Symantec, Juniper and McAfee/Intel in the security appliances and services market. It also boosts its tech line-up against system vendors such as IBM and HP.
Clive Longbottom of industry analysts Quocirca, said buying Sourcefire bolsters Cisco ability to deliver complete systems, not just networking components.
"Cisco wants to 'own' the whole stack, and Sourcefire bolsters its capabilities on the security front," Longbottom said.
"Building this in to UCS [Unified Computing System] would definitely give a better ongoing engineered system to continue playing against the VCE V-Blocks, IBM PureSystems and Dell V-Starts and so on. It may also provide better capabilities straight into its switches - but this could mean messing with IOS to ensure that the security worked at line speed."
Cisco will have to align Sourcefire's technologies against the push towards Software Defined Networking, which is changing the shape of data centres, according to Longbottom.
"SDN is coming along," Longbotton argued, "The idea here is to take all the smarts out from the switch and move it to commodity servers. Therefore, instead of each switch being stand-alone intelligent (and falling out when updates are applied at different levels across the switches), a higher-level management system is put in place that works across the whole switch estate, rather than one at a time. This makes applying network policies and dealing with network traffic issues far 'cleaner'."
"Cisco has said that it will adopt SDN using OpenFlow - but we have yet to see how 'standard' this will be. My view is that we will end up with a hybrid system of some functions being dealt with via an SDN layer, but some stuff will still be dealt with via ASICs and FPGAs and code in the switches themselves."
"Sourcefire could find that a lot of what is there moves up to the SDN level - in which case it becomes swap outable for another vendor's software. What Cisco may do is embed bits of Sourcefire capabilities into UCS and into certain switches where maximum packet performance is required and provide it as an offering for those who want standard switches but a total Cisco network management approach. In some cases, Cisco will just accept that the user will choose a different systems/network management tool with its own OpenFlow SDN capabilities," he added. ®