Cisco buying Web security firm ScanSafe for $183 million

Acquisition adds software-as-a-service Web security to Cisco portfolio


Cisco has announced plans to buy privately held ScanSafe, a maker of software-as-a-service (SaaS) Web security services for enterprises and small-to-midsize businesses, for $183 million.

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The ScanSafe acquisition dovetails with Cisco's 2007 purchase of on-premise Web security appliance maker IronPort. With these two deals, Cisco will have SaaS and premises-based Web security offerings.

Cisco says it expects Web security to be a $2.3 billion market by 2012.

ScanSafe's service will be integrated with Cisco's AnyConnect VPN Client. Cisco says ScanSafe's global data centers and multi-tenant architecture will allow Cisco to provide cloud-security services for customers worldwide.

"Hosted offerings are an increasingly attractive alternative for a wide range of enterprises and SMEs over secure mail gateways," says Paul Roberts, an analyst at The 451 Group. "Cisco made a big bet on IronPort back in 2007, but the last major rev of that platform in March -- unveiling Cisco IronPort Hosted Email Security -- suggested that the company still had a long way to go before it would have a SaaS version of that platform that could compete with the top tier messaging SaaS vendors.

Cisco needed expertise around developing a SaaS offering both for messaging and Web, Roberts says. "What will be interesting is seeing how well Cisco is able to wrap its brain around selling hosted security services as opposed to 'gear,' broadly defined," he says. "It will be a major test of Cisco and [its Security Technology Business Unit] to hang onto the ScanSafe team, leverage their smarts to build out Cisco's own SaaS offerings and find a way to marry that to the company's existing products, services, sales model, etc. in a way that doesn't cause huge dislocations."

Under terms of the agreement, Cisco will pay approximately $183 million in cash and retention-based incentives. The acquisition is subject to various standard closing conditions and is expected to close in the second quarter of Cisco's fiscal year 2010.

Upon close of the acquisition, ScanSafe will become part of Cisco's Security Technology Business Unit, reporting to Vice President and General Manager Tom Gillis.

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