Attacks/Breaches
7/24/2013
11:14 AM
Mike Rothman
Mike Rothman
Commentary
Connect Directly
RSS
E-Mail
50%
50%

Past Performance And Future Results

Folks forget that Cisco used to be very good at doing acquisitions, so is it premature to determine recent performance predisposes future results regarding Sourcefire?

It's neither healthy nor productive to pay attention to Twitter for too long. The echo chamber certainly echoes, especially in the face of huge news, reflecting everyone's opinion back and forth until it feels like a denial-of-service attack on my frontal lobe.

A case in point happened this week when Cisco announced the $2.7 billion acquisition of Sourcefire. The Twitter activity occurred in two waves: The first wave was a lot of folks sending well-earned congratulations to Marty Roesch and the rest of the Sourcefire team. That lasted for about two or three minutes. Then the negative nellies came out to play for the rest of the day. There was chapter and verse about how Cisco has bungled one security acquisition after another -- and prognostications it would do the same with Sourcefire.

Personally, I'm not ready to shovel dirt on Snorty less than 24 hours after becoming $2.7 billion worth of bacon. And it's not because I'm a contrarian. It's because I've been around for a long time, and I remember when Cisco used to do acquisitions very well. Like when it did its first big acquisition of Crescendo in 1993. That product became the Catalyst, which has generated the GDP of Panama in revenue for Cisco over the years. It also provided many of the senior managers who drove Cisco through its heyday.

The company has done 160-plus deals; statistically, some of those deals turn out well, and some turn out pretty badly. Like everything else in today's world, you forget the good ones and fixate on the bad ones -- especially if you were a customer of the acquired technology and saw innovation crawl, customer support suffer, and the sales channel get a lot harder to work with. All of these are symptomatic of multibillion-dollar behemoths, proving over and over again that elephants aren't very good dancers (regardless of what Gerstner said back in the day).

The sensitivities around the Sourcefire deal are exacerbated not only because security folks are cranky and negative, always preparing for the inevitable kick in the groin, but also because a bunch of the bad deals happened in the security sector. The haters broke out their Wheel Group t-shirts once the deal was announced and got all nostalgic over what could have been. Oh, how the IPS business would be different today if it hadn't bungled that deal, right? To be clear, the issues Cisco had with these deals were macro issues regarding Cisco's leadership and suspect dedication to the security business.

IronPort is a case in point. When that deal happened, IronPort accelerated its momentum significantly, and it let the IronPort management team run the Cisco security business. For the first couple of years, that deal was a big success. Then the economy hit the crapper in late 2008. Cisco had to focus on its core business -- and it did. The former IronPort guys got tired of fighting for resources for security and went back to their entrepreneurial roots. The business became mature, and you'd think it were suffering. But it turns out Cisco still sells a lot of email security gateways because the distribution engine still works. But perception is reality, right? The market determined it was just another bungled deal from a company that bungled all of its security deals. Clearly that doesn't bode well for Sourcefire, right?

We could have had the same conversation back in November 2011 when IBM acquired Q1 Labs. It's not like IBM had a great track record of doing security deals successfully (remember ISS?). But it has done a good job of both integrating and accelerating the momentum of Q1's SIEM product and using that to drive its entire security business. How did IBM do it? It's all about the people. IBM (wisely) gave the keys to Q1's management team to run its new security business. It has also invested tremendous resources in the business.

That's what Cisco has to do. It has talked about putting Marty Roesch in charge of security strategy, and that's a start. It has to make significant investments to keep the Sourcefire team engaged and give it the resources it needs. If it starts losing the intellectual capital and suffers a significant mass exodus as it has in the past (and most other big companies suffer after acquiring smaller companies), the negative folks will be right.

In fact, there is a better than even chance the deal flames out. It's hard to maintain focus in an almost $50 billion revenue company and although these companies pay lip service to the importance of security, they keep the lights on selling switches and routers, servers, or databases. But it's too early to call the deal a failure. I prefer to let companies fall on their own swords in their own time.

And statistically most of them do.

Mike Rothman is President of Security and author of The Pragmatic CSO Mike's bold perspectives and irreverent style are invaluable as companies determine effective strategies to grapple with the dynamic security threatscape. Mike specializes in the sexy aspects of security, like protecting networks and endpoints, security management, and ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
AnonymousMan
50%
50%
AnonymousMan,
User Rank: Moderator
7/26/2013 | 4:31:51 PM
re: Past Performance And Future Results
I don't disagree that Cisco needs to either succeed or fail on their own; of course they do and I hope they are successful. However, as buyers of enterprise solutions, we don't have the luxury of just hoping they'll get it right THIS time. What do you make of a company that releases a brand spanking new IDPS line (new hardware, new software) and then goes and buys Sourcefire? It could be genius; but given their history I know where I lean. Imagine you just spend a couple million on the new Cisco IPS appliances? I have not, in case you're wondering:-)

Bottom line for me, this was a bit like Kmart buying Saks Fifth Avenue. Could be good for Kmart, not likely to be good for Saks.
Register for Dark Reading Newsletters
White Papers
Cartoon
Current Issue
Flash Poll
Video
Slideshows
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2014-3352
Published: 2014-08-30
Cisco Intelligent Automation for Cloud (aka Cisco Cloud Portal) 2008.3_SP9 and earlier does not properly consider whether a session is a problematic NULL session, which allows remote attackers to obtain sensitive information via crafted packets, related to an "iFrame vulnerability," aka Bug ID CSCuh...

CVE-2014-3908
Published: 2014-08-30
The Amazon.com Kindle application before 4.5.0 for Android does not verify X.509 certificates from SSL servers, which allows man-in-the-middle attackers to spoof servers and obtain sensitive information via a crafted certificate.

CVE-2010-5110
Published: 2014-08-29
DCTStream.cc in Poppler before 0.13.3 allows remote attackers to cause a denial of service (crash) via a crafted PDF file.

CVE-2012-1503
Published: 2014-08-29
Cross-site scripting (XSS) vulnerability in Six Apart (formerly Six Apart KK) Movable Type (MT) Pro 5.13 allows remote attackers to inject arbitrary web script or HTML via the comment section.

CVE-2013-5467
Published: 2014-08-29
Monitoring Agent for UNIX Logs 6.2.0 through FP03, 6.2.1 through FP04, 6.2.2 through FP09, and 6.2.3 through FP04 and Monitoring Server (ms) and Shared Libraries (ax) 6.2.0 through FP03, 6.2.1 through FP04, 6.2.2 through FP08, 6.2.3 through FP01, and 6.3.0 through FP01 in IBM Tivoli Monitoring (ITM)...

Best of the Web
Dark Reading Radio
Archived Dark Reading Radio
This episode of Dark Reading Radio looks at infosec security from the big enterprise POV with interviews featuring Ron Plesco, Cyber Investigations, Intelligence & Analytics at KPMG; and Chris Inglis & Chris Bell of Securonix.