The IronPort acquisition will give Cisco a strong opportunity to move into the fast-growing, and fast-consolidating, e-mail security market.
On 4 January 2007, Cisco announced a definitive agreement to acquire IronPort Systems, a provider of enterprise messaging security products. Cisco expects to close the transaction in the third quarter of its 2007 fiscal year. After the closing, IronPort will operate as a separate business unit within Cisco's Security Technology Group.
The IronPort acquisition will allow Cisco to move into the fast-growing e-mail security market, which is currently valued at approximately $850 million and growing at a rate of approximately 40% annually. The key technology value that Cisco will receive is a strategic foundation on which to begin building a security infrastructure for unified communications, including e-mail, instant messaging (IM) and voice over IP (VoIP). Gartner expects Cisco to complete this strategy with more acquisitions, particularly in the IM hygiene market.
Cisco was also attracted to IronPort's SenderBase Network reputation service. Gartner expects Cisco to expand on the concept of IP reputation for all traffic types and leverage its other network components as sources of reputation information. This acquisition makes SenderBase the de facto reputation standard, and also gives a boost to the Cisco-supported DomainKeys Identified Mail (DKIM) standard.
The only area of overlap is between Cisco’s Content Engine Series and the recently launched IronPort S-Series. Cisco plans to continue to focus Content Engine on wide-area content acceleration for branch office applications and file transfers, while the S-Series will provide browser security in the outbound Web gateway. Technology transfer to normalize the features of these lines will be the acquisition's greatest technical challenge, but Gartner sees this as a lower priority for Cisco than the integration and extension of SenderBase.
This acquisition will likely have no impact on IronPort's partnerships, but will place Cisco in direct competition with its traditional partners McAfee, Microsoft, Symantec and Trend Micro. Gartner does not, however, expect these conflicts to present significant barriers to cooperation with Cisco in other areas, such as network access control.
The consolidation in the e-mail security market is now almost complete. Other vendors will find it difficult to compete with industry leaders Cisco, Microsoft and Symantec in the enterprise market. IBM and (potentially) Juniper Networks are the only other major vendors that have a strategic interest in this market, though BorderWare and Proofpoint remain as respected independent players. Gartner believes the two remaining service providers, MessageLabs and Postini, will likely be acquired by telecom providers in their respective markets.
Enterprises evaluating e-mail security solutions: Place Cisco/IronPort at the top of your shortlists, because this acquisition removes the corporate-ownership and financial-viability concerns inherent in a best-of-breed vendor in a consolidating market.
IronPort customers: Recognize that — even though the decision to maintain IronPort as a separate business unit should reduce transition problems — the transition to Cisco ownership may result in service disruptions, particularly if key personnel leave.
"PostX Acquisition Gives IronPort Stronger Integrated Offering” — The acquisition of PostX significantly improves IronPort's position in the consolidating e-mail gateway security market. By Peter Firstbrook
"Magic Quadrant for E-Mail Security Boundary, 2006” — Gartner continues to believe that consolidation in this market is inevitable, and buyers should be wary of vendors with weak financials. By Peter Firstbrook and Arabella Hallawell
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