IBM's Stealthy Security Play

After being acquired by IBM in August, ISS is doubling in size, tripling its customer pipeline, and laying the groundwork for a major security push by Big Blue, top exec says



SAN FRANCISCO -- RSA Conference -- It took Tom Noonan 12 years to grow his company -- the venerable Internet Security Systems (ISS)-- to 1,400 employees. But within the next nine months, Noonan expects the size of his once-tiny company to more than double.

"To make that sort of growth -- at that speed, in a company of our size -- is just nuts," Noonan said in an interview here earlier this week. "It’s crazy."

Back in August, ISS was acquired by IBM in a blockbuster deal that was valued at $1.3 billion. (See IBM Up-Ends Security Services Market.) At the time, many observers wondered what Big Blue would do with the security vendor, which was placed into IBM’s Global Services unit. (See IBM Merger Gets Mixed Responses.)

Since that time, however, ISS has quietly become IBM’s security division, taking on hundreds of Big Blue’s customers, assimilating hundreds of new and former IBM employees, and taking on the mammoth task of integrating dozens of security products from IBM, its Tivoli enterprise management subsidiary, and ISS itself.

And Noonan, contrary to some experts’ predictions, is still in charge.

"At the time of the acquisition, there was a lot of talk that we would be integrated into IBM and effectively disappear," says Noonan, whose expression bears the haggard look of someone who hasn’t had a day off in three months (including Christmas), but with a gleam in his eyes like a startup CEO on the day of his company’s IPO. "I’m here to tell you, that hasn’t happened. In fact it’s been mostly reverse integration, with us taking on a bunch of employees from IBM, including some who’ve been there for years."

The ISS unit is tasked with developing the security hardware, software, and services that will be delivered to IBM customers in the days, months, and years to come. The organization’s sales pipeline has tripled in the last month, Noonan says. About 300 new employees have been added, and that’s just the beginning.

"There is not a single department in our organization that’s not hiring in force," says Noonan. "We’re adding people in research and development, in quality assurance, in sales. And our rate of attrition has actually gone down since we were acquired. That surprised me -- I would’ve expected it to go up, but people are sticking around to see what's going to happen."

Aside from hiring, ISS has been busy integrating technologies from many of the computer giant’s units, including Tivoli and IBM Research. "We’re absolutely blown away by what’s available at IBM Research," says Noonan. "They’re spending $5 billion a year on new technology -- and a good portion of it is security-related -- and a lot of it is just sitting on the shelf," he says. ISS has dispatched is X-Force research unit to catalog the IBM Research technology, and some of that technology will be immediately inserted into ISS’s product plans, he adds.

In the nearer term, ISS is working on integrating its security technology with IBM's, Noonan says. The company is close to finishing links between the Tivoli Access Manager and the ISS Proventia line of security software, and there will soon be new security tools for the Lotus Notes environment, he reports.

"IBM's got one of the biggest email and collaboration environments out there, but it hasn't done anything with security" in Notes, Noonan notes. ISS is also working on additional security for WebSphere, IBM's Web applications environment. "We're working on five or six new products simultaneously," he says.

ISS, which had already built a busy managed security services business, also will marshall IBM's efforts to offer security outsourcing services. "In some cases, security services are driving companies to larger outsourcing contracts, rather than the other way around," Noonan says. ISS is already offering eight on-demand services in the security space.

So will IBM soon make a play to become the industry's security leader, as Cisco and Microsoft have done? Absolutely, Noonan says.

"If we aren't the company that people put at the top of the list of security vendors in a year, then we've failed," he says. "IBM already has a huge chunk of the security market, but it is so big that nobody knows about it. [IBM-ISS] will be a $5 billion organization in no time."

— Tim Wilson, Site Editor, Dark Reading

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    Tim Wilson is Editor in Chief and co-founder of Dark Reading.com, UBM Tech's online community for information security professionals. He is responsible for managing the site, assigning and editing content, and writing breaking news stories. Wilson has been recognized as one ... View Full Bio

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