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Partners Question Future Margins As Cisco Absorbs IronPort
9:30 PM EDT Mon. Jun. 25, 2007
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While Cisco's current strategy calls for keeping IronPort's channel separate from its own, IronPort partners said they expect their 20 percent-plus margins to become extinct once the products are inevitably opened up to the broader Cisco channel.
The $830 million deal, first unveiled January 4, brings IronPort's portfolio of e-mail security, Web security and security management appliances into the Cisco fold. The San Jose, Calif.-based networking vendor has dubbed the portfolio expansion "version 3.0" of its Self-Defending Network strategy.
The plan is to complement Cisco's existing deep packet inspection capabilities with the new content security capabilities afforded by the IronPort portfolio, moving toward what Cisco is calling "wide traffic inspection."
Over time, the companies' new joint roadmap calls for integration between IronPort's reputation technology -- part of its SenderBase service that tracks multiple metrics to determine the trustworthiness of URLs -- into Cisco's firewalls, said Scott Weiss, former CEO of San Bruno, Calif.-based IronPort, now vice president and general manager of Cisco's IronPort division. Cisco's Adaptive Security Appliance (ASA) and Integrated Service Router families should receive upgrades by year's end or early next year that add in IronPort capabilities, he said. "We'll increase the efficacy of SenderBase with data from Cisco firewalls," Weiss said. At the same time, customers will be better protected against threats such as spam because their firewalls and e-mail gateways will talk to each other, he said.
Solution providers said customers stand to gain tremendous benefits from a merging of the two companies' technologies.
"The potential to add productivity and ease of support is tremendous," said Bob Cohen, CEO of CGAtlantic, a solution provider in New York that works with both vendors.
For now, solution providers said they are heartened by Cisco's stated plans to let IronPort maintain a high level of autonomy, particularly in the way it runs its channel.
"I've been shocked at how autonomous they're keeping IronPort," said Tom MacArthur, principal of Storbase, an IronPort partner in Waltham, Mass., that is not currently a Cisco partner. "That's a standard mantra in mergers and acquisitions -- you hear it so many times -- but it seems to be the case."
IronPort's channel strategy is part of what made it so attractive, said Mick Scully, vice president of product management for Cisco's Security Technology Group.
"We're buying a business model, and a big part of that is IronPort's channel," Scully said.
NEXT: Partners Doubt Margins Will Last
