Cisco, the giant American manufacturer of networking equipment, has followed through on its long-anticipated deal to buy the cyber-security company Sourcefire. The deal is massive, and the $2.8 billion outlay from Cisco is an obvious attempt to bolster its security business through introducing an influx of innovation and talent.

Who are Sourcefire?

The foundations of the company were established in 1998 when Sourcefire’s founder, Martin Roesch, created Snort – a free to use open source intrusion and detection system that to this day remains one of the best and most popular tools of its kind available on the market.

Sourcefire was a company created to provide commercial opportunities for the free to use Snort. This was achieved by providing administrative, reporting and analysis tools that make the technology robust enough to be used by businesses for their security needs.

In the intervening years, Sourcefire have added a number of features to its services including anti-malware technology, first-rate firewall capabilities and real-time open source analysis. All highly innovative services which have been created in no small part by the expertise found within Sourcefire’s vulnerability research lab.

The acquisition

The large sum involved in the acquisition is reflected in a number of factors. One of which is the fact that the company’s market share in the detection and prevention of intrusion on computer systems sector increased from 8.4% in 2011 to 11.2% in 2012, which is behind only McAfee, Cisco and IBM. Another is that

Sourcefire reported revenue of $223.1 million for the full year of 2012, an increase of 35% on their year-over-year figures.

These two factors point to a growing and successful company. However, the true reflection of the price is based on the talent and potential found within the 650 staff that it employs worldwide and, especially, within its vulnerability research lab. Because of this, Cisco are paying a 30% premium above Sourcefire’s present market value, so they are able to implement retention incentives that ensures the hard to find talent stays working within the company.

What will be the impact?

Sourcefire’s reputation and security products based on intrusion prevention are well respected in the industry.

Therefore for Cisco, which Dwayne Melancon, chief technology officer for Tripwire describes as having ‘been quiet on the security front for quite some time’, this is very significant.

It shows recognition of the changing world of internet security where mobility and cloud make the implementation of security ever more complex, and how these concerns need to be accounted for within Cisco’s networking equipment. This is especially clear in light of a statement released by Cisco upon the announcement of the acquisition, which reads: ‘Cisco and Sourcefire will combine their world-class products, technologies and research teams to provide continuous and pervasive advanced threat protection across the entire attack continuum - before, during and after an attack - and from any device to any cloud’.

For Cisco network suppliers this is great news. The company’s acquisition of Sourcefire will allow the smaller firm the resources to achieve their goal of creating a new model of security across an extended network more quickly. This, in turn, will improve the quality and performance of Cisco products, as well as confidence within consumers that their network hardware features the capabilities to cope with evolving and advanced security threats.

What do you think the future will hold for Cisco’s acquisition of Sourcefire? Please share your thoughts in the comments section below.