3Com is about to begin slowly cutting the ties with its IPS subsidiary TippingPoint: The company said it will file an IPO for TippingPoint by the end of the year.

The plan is for 3Com to retain a majority stake in TippingPoint after the IPO, and then gradually reduce its shares in the company, which it originally purchased for $425 million over two years ago. Industry analysts say the move in part may be a response to EMC's recent successful spinoff of 10 percent of VMWare, which they say helped bump up EMC's stock value. "3Com probably looked at EMC -- which has a far more valuable property in VMware -- and said, ‘why don’t we do that?’ " says Brenon Daly, financial analyst for TechDealmaker/The 451 Group.

3Com's announcement of its plans for a TippingPoint IPO also comes on the heels of the much-heralded IPO by Sourcefire last fall, although so far Sourcefire's numbers haven't gone as well as expected. (See A Public Snort.)

The IPS market, meanwhile, has taken some heat for its limitations, as well as the fact that it's not really a "set-and-forget" technology. But IPSes are gradually gaining new features as well as getting integrated with next-generation firewalls. (See What Use Is an IPS? and IPS: Still Playing Catch Up.)

"The efficacy of IDS/IPS is always being questioned, but it remains a checkbox on many lists," says Nick Selby, a senior analyst with The 451 Group.

And despite criticism of IPS technology, the market isn't exactly anemic, according to Gartner estimates. John Pescatore, vice president and distinguished analyst at Gartner, say the analyst firm pegs the market at about $500 million, and the technology is gradually being integrated with firewalls. "The next-generation firewalls from Cisco, Check Point, Juniper, and others are including IPS capabilities" as well, says Pescatore.

He expects most major firewalls to include IPS technology within the next three years. "Three years from now when there's a product refresh, companies are going to say 'Why do I have to buy two boxes when you can sell me one box?' "

Pescatore says 3Com's plans to drop TippingPoint may be more about prioritizing its financial resources, such as its joint venture with China's Huawei, called Huawei-3Com (H3C) to sell networking wares in China. Rather than further investing in a separate security-box market, 3Com decided to spin it off and focus on its bread-and-butter routers and other products, he says.

3Com's official statement on the IPO indeed hinted at the two companies each getting back to their roots.

"We believe this move will enable 3Com and TippingPoint to focus on their core strengths, target markets, and strategic goals," said Edgar Masri, 3Com's president and CEO in a press statement. "The decision to IPO TippingPoint enables 3Com to focus more closely on its core business -- delivering integrated secure, converged network infrastructure solutions to enterprises and increasing H3C sales worldwide. This move also reinforces 3Com's commitment to its Open Services Networking (OSN) strategy of providing organizations worldwide with high-quality, low-cost, secure networking infrastructure solutions that enable the convergence of applications and emerging technologies into the network."

3Com had not responded to press inquires as of the posting of this story.

— Kelly Jackson Higgins, Senior Editor, Dark Reading