IBM Buys ISS for 1.3 Billion

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Wow, this is a lot to pay for a security company, and in my opinion, about twice as much as what it is worth. ISS, makers of the RealSecure line of Intrusion Detection Sensors that are the bane of many in the Security Industry, have played second and third fiddle to other IDS vendors for a long time now.

SourceFire was up for sale too, and it has a top notch sensor in the Snort brand. Why IBM passed on them and went with ISS is anyone’s guess. Perhaps at the time IBM was shopping, Sourcefire looked like a cinch to go with Checkpoint, but the Sourcefire/checkpoint deal got nixed by the US government because they did not want this technology owned by the Israelis.

From the AP here:

IBM Corp. said Wednesday it will spend $1.3 billion in cash to acquire Internet Security Systems Inc., which performs network monitoring and analysis services for companies.

Buying ISS could bolster Big Blue’s ability to take on what it calls “managed security services” for its business customers. ISS helps guard against data theft and other problems with automated monitoring products and with technical consultants, who would become part of IBM’s vast services arm.

Based in Atlanta, ISS says its 11,000 customers include 17 of the world’s largest banks. The company earned $38.5 million on $330 million in revenue last year; this year’s revenue is expected to surpass $350 million.

And, this is another dagger in the heart of Symantec too, which competes against ISS in the Managed Security Services space. In fact, had Symantec not purchased Veritas and suddenly become engulfed in debt and back taxes, Symantec could have been in a good position to have merged with IBM.

But with its agressive marketing and strong brand recognition, IBM has made a good move to become the leader in the Security Space.