Cisco Systems bought up network security firm Psionic
Software of Austin, Texas, on Tuesday, shoring up the equipment giant’s network security
portfolio on the same day it announced plans to cater to small- to
medium-sized businesses (SMBs).
The deal, valued up to $12 million dollars, moves the eight-man security
software company into the Cisco virtual private networking (VPN) and
security services (VSEC) division. Officials expect to the merger to close
in the second quarter of 2003.
Psionic’s software bolsters Cisco’s existing security product suite by
introducing an intrusion detection system application that officials said
cuts false alarms by 95 percent. False alarms cause networks to shut down
in some cases, as administrators track down the source of
intrusion. Cisco expects the integration of Psionic’s software into its
own security products will result in far fewer false alarms.
The relatively small investment in its security product is one small
example of the equipment maker’s desire to reach into the SMB market, which
to date, it hasn’t spent much time pursuing. Cisco’s enterprise- and
carrier-level routers have been the mainstay of the company’s product line,
and where its sales and engineers spent the bulk of their time.
Cisco believes it has all the tools in place: an end-to-end technology
solution that integrates voice, data, security and remote administration,
all which lowers the total cost of network ownership. Realizing SMBs are
looking more at managed service providers as an outsourcing option, the
equipment maker is focusing on customer premise equipment (CPE) and
infrastructure products.
The company even has a name for the SMB program, “The Cisco Internet
Business Roadmap,” which helps IT managers pick out the best blend of
equipment, services and software for their company.
Cisco officials said they would be offering “flexible” financing plans and
competitive rates in the near future to court SMBs, but were not available
at press time to expand on that strategy.
Cisco can ill afford to hold a fire sale on its service and equipment, with
the dramatic downturn the economy has taken the past two years. Its
flagship products, the high-end routers used by telecom companies, are not
in as high a demand as in recent years, given the fact startup companies
aren’t starting up as frequently and most telecoms are scaling back (not
boosting) their networks.
