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ISS enters Big BlueBrian McKenna

Not so much a summer of

love as a season of wed-

ding accouncements. Microsoft

swallows Whale; EMC scoops

RSA; and now IBM takes ISS.

Although a true IT security

industry pioneer, ISS has never

developed a full security suite:

no anti-virus, and no incursions

into authentication or identity

management.

But it is almost synonymous

with IDS (intrusion detection

systems), and has benefited

from high brand recognition

among security specialists. Co-

founders Tom Noonan and

Chris Klaus, and CTO Chris

Rouland enjoy celebrity status

in the infosec community.And

its Managed Security Services

business is outstanding among

pure play security companies.

Two years ago, Infosecurity

Today said that ‘ISS’s value

proposition may not be

enough, in about two years’

time when infrastructure

providers start embedding secu-

rity into their products’.

Alain Dang van Mien, re-

search director at Gartner, told

us, back then, in May 2004:“a

discontinuity will be brought

about by the big players who

don’t plan to make money on

security, but will embed more

security technology into their

operating systems and net-

works”.

Looks like the 'discontinuity'

is among us.

At that time, ISS’s Pete

Privateer, SVP of global market-

ing, dismissed that argument,

saying:“To buy into the Gartner

premise, you have to accept the

idea that security groups built

up over the last ten years are

going to be replaced by systems

and network administrators. I

can’t see that happening”.

It looks like the company has

seen that happening.

However, Jaap Smit, senior vice

president EMEA for ISS chal-

lenged these statements.“Being a

pure play security company has

always worked well for us”, he

said. He conceded that “more

and more decisons do involve

more than the security function.

However, from our point of view,

that shift to the networking guys

getting involved is a good thing;

budgets are bigger there.

“At least we can no longer be

seen as just a niche, albeit vi-

sionary, player”, he said.

On 23 August, IBM and ISS an-

nounced the two companies

have entered into a definitive

agreement for IBM to acquire

Internet Security Systems in an

all-cash transaction at a price of

approximately $1.3 billion, or

$28 per share.

In a statement they said that

the acquisition reinforces IBM’s

position in the area of Managed

Security Services. ISS will join

IBM as a business unit within

IBM Global Services’ Security or-

ganization.All 1,300 employees

will keep their jobs and the exist-

ing management team will re-

main in place.

Uttering the magic IBM words,

‘on demand’,Tom Noonan,

President and CEO of ISS said:“By

delivering an integrated security

platform that is adaptable and ex-

tensible to address new threats

and business requirements with-

out incremental complexity and

cost, ISS has delivered the founda-

tion for delivering security as a

service.These on-demand capabil-

ities, together with our managed

security services, appliances and

software will bolster IBM’s lead-

ing security services”.

IBM, it is said, will utilize ISS’

X-Force security intelligence

service, which protects net-

works with detailed analyses of

global online vulnerabilities and

threat conditions.

Jaap Smit contested analyst

comment that the X-Force might

lose its edge in teh new set up.

“IBM has put a lot of money be-

hind this acquisition.They value

the totality of what ISS does, and

do not want to lessen the value

of taking it apart”.

He also dismissed commen-

tary suggesting that the acquisi-

tion will impact negatively on

ISS's distribution network.

“Contracts will stay in place”, he

said.“IBM saw our network as of

interest, and our partners, too,

will get to play on a larger stage”.

The ISS network of security

operations centres (SOCs), which

include sites in Tokyo, Brussels,

Brisbane, Detroit and Atlanta, will

also be added to IBM’s existing

global network of SOCs.

The acquisition is the biggest

IBM has made since the PwC

consulting business in 2002.