Management Toolkit

IBM snaps up Internet Security Systems

Martin LaMonica CNET News

Published: 23 Aug 2006 17:15 BST

IBM made a resounding move into security on Wednesday, acquiring Internet Security Systems for $1.3bn.

The all-cash transaction of about $28 per share is meant to bolster IBM's ability to deliver security services to corporations, the company said.

ISS builds network protection products and services, including intrusion detection and monitoring tools.

IBM said it intends to use ISS's expertise and software to provide more robust security-related services to its corporate customers.

"This acquisition will help IBM to provide companies with access to trained experts and leading-edge processes and technology, to evaluate and protect against threats and enforce security policies," said Val Rahmani, general manager of infrastructure management services at IBM Global Services.

The ISS acquisition, expected to close in the fourth quarter of this year, adds to a rapid-fire succession of big purchases at IBM. In August alone, IBM has announced plans to buy Webify Solutions, MRO Software and FileNet. The tab, if all the deals go through, will exceed $3.6bn.

Looking to boost revenue from software and services, most of the company's acquisitions — which total more than 40 since 2003 — have been software firms.

IBM is seeking to grow profits by creating a comprehensive product portfolio and deliver a combination of software and consulting services, according to company executives.

With ISS, Big Blue intends to deliver the company's products through consulting engagements and hosted services.

"By delivering an integrated security platform that is adaptable and extensible to address new threats and business requirements without incremental complexity and cost, ISS has delivered the foundation for delivering security as a service," said Tom Noonan, president and chief executive of ISS.

IBM already offers some managed security services and includes security software in its Tivoli product line.