Cisco expands security software presence

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Cisco on Thursday moved to strengthen its presence in security software when it agreed to buy IronPort Systems, a privately-owned developer of messaging and internet security appliances, for $830m in stock and cash.

The deal will bring Cisco in closer competition with the largest companies in the security software business, such as Symantec, McAfee and Microsoft. By buying IronPort, the San Jose-based technology group will be able to offer customers a wider range of security products, including spam protection and other filters.

“Securing e-mail, messaging and other sorts of content is of primary concern to enterprises and other organisations,” Cisco said in a statement.

Cisco’s expansion in security software reflects the company’s desire to find new avenues for growth away from its traditional business of developing routers and other equipment for telecommunications companies. Consumer-based communications have also been a recent area of growth, highlighted by the 2005 acquisition of Scientific-Atlanta, the cable set-top box maker, for $5.5bn.

IronPort and its management will be folded into Cisco’s security technology group, which is run by Richard Palmer. The deal will offer a large pay-out for Scott Weiss and Scott Banister, who founded IronPort in 2000.

Menlo Ventures was the main venture capital backer of the company, which had been considering an initial public offering before deciding on a sale to Cisco.

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