Security Advisor

Cisco Looks To Bolster Network Security with Sourcefire Acquisition

The company is expected to pay close to $2.7 billion once the deal is finalized later this year.

Cisco revealed today that it has reached a deal to purchase Sourcefire, a Md.-based network security firm, for approximately $2.7 billion.

The announcement came during a joint statement that discussed how bringing Sourcefire's offerings into Cisco's line of products will allow the company to offer a comprehensive security solution to enterprises over multiple products.

"Sourcefire aligns well with Cisco's future vision for security and supports the key pillars of our security strategy," said Hilton Romanski, Cisco's vice president of corporate development. "Through our shared view of the critical role the network must play in cybersecurity and threat defense, we have a unique opportunity to deliver the most comprehensive approach to security in the market."

Founded in 2001, Sourcefire's offerings include multiple security software solutions for mid- to large-sized enterprises that include threat detection, malware protection, firewalls, network security and BYOD support. It's also one of the main players in providing the U.S. government with security solutions.

This move could potentially give Cisco a leg up in the security software market -- an area the company has been hard at expanding into as its network hardware market hold continues to slip, according to Jason Ader, an analyst at William Blair & Co.

"This is certainly going to boost the revenue, but more so than anything else it is going to give Cisco engineers technical acumen and establish credibility with Cisco in this space," said Ader in an interview to Bloomberg Businessweek. "Sourcefire's products are a lot better."

Not only does this move make Cisco a more legitimate player in the security software market, but it is also picking up a company that has seen strong financial growth in the past few years. Sourcefire's 2012 numbers showed a revenue growth of 223.1 million -- an increase of 35 percent over the previous year.  And, on the heels of today's news, Sourcefire's share values saw a jump of 27.78 percent at the end of trading on Tuesday.

Until the deal is finalized, which is expected to be sometime in the second half of the year, the two companies will remain independent. After that, Sourcefire's more than 650 employees will transition over to Cisco.

"Cisco's acquisition of Sourcefire will help accelerate the realization of our vision for a new model of security across the extended network," said Martin Roesch, founder and chief technology officer of Sourcefire. "We're excited about the opportunities ahead to expand our footprint via Cisco's global reach, as well as Cisco's commitment to support our pace of innovation in both commercial markets and the open source community."

What's your take on Cisco's move? Does the acquisition of Sourcefire bring some security credibility to the company? Sound off in the comments below.  

About the Author

Chris Paoli is the site producer for Redmondmag.com and MCPmag.com.

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