Cisco announced the deal this morning, offering roughly $2.7 billion for publicly traded Sourcefire. That’s $76 per share, nearly a 30 percent premium — and naturally, Sourcefire’s stock is up 28 percent today, at $75.49.
“At a little more than twice the price — for more revenue — than Meraki. It’s not a bad deal,” writes WireTap Ventures partner (and SDNCentral co-founder) Matt Palmer in an email.
Cisco has put a lot of talk behind security, pledging to integrate security with pretty much everything — but when it comes to specific products like the next-generation firewall, Palo Alto Networks has been running away with the concept and Sourcefire had begun working on such a product as well.
In that sense, the deal gives Cisco some needed catch-up while setting the stage for future products. The company also gets a rock-star team of security experts with pedigrees that go back to the
But there’s also the potential for services, Palmer says. That’s another area where Cisco is promising to expand, and it’s been willing to buy assets to further the cause, Palmer says In the case of Sourcefire, Cisco gets products — firewalls, IDS, and anti-malware — and a business model for services, such as online security capabilities. “It will be interesting to see what or if any Snort capabilities get integrated with SDN Controllers, such as OpenDaylight,” Palmer writes, because Cisco could build a responsive network service out of the combination where Snort sees an attack and communicates with the controller to reprogram the network to block the attack, with the OpenDaylight controller steering traffic to Snort.
And because Sourcefire’s products have been x86-based, they give Cisco a potential foothold for network functions virtualization (NFV).
Furthering the NFV cause, Snort has a devoted following, bringing Cisco not only the product but also an open-source community. “It feels like Cisco is taking a play from IBM‘s book leveraging open-source software with 5 via services with OpenStack, OpenDaylight, and now Snort,” Palmer writes.
Security and the SDN Angle
Security is starting to be recognized as an issue the network has to deal with as opposed to it being just an issue of secure access to the network, analyst Tom Nolle of CIMI Corp. argues in a blog posting published Tuesday. It’s the cloud that has gotten enterprises thinking that way, and as a result, security is important to any company that wants to be a leader in the cloud — Cisco, for instance.
“IBM and Microsoft still lead Cisco in security influence, but obviously a shift in focus toward network-based security would benefit Cisco and hurt both its higher-rated rivals,” Nolle writes.
For competitors, the best tactic would be to get “way out in front of Cisco on the SDN and NFV aspects of security,” because Cisco — with a lot to lose if SDN and NFV take hold quickly — is likely to be conservative in its approach, Nolle writes.