Cisco Targets Software And Security Deals

by CXOtoday News Desk    Aug 13, 2015


Cisco System’s new CEO Chuck Robbins who has only been in the job three weeks is already hinting at acquisitions. “We’ll continue to be very acquisitive going forward, especially in areas like software and security,” he said at a conference call to discuss the company’s quarterly results.

Experts believe that in the recent past, Cisco has flagged these areas as growth opportunities. They can also generate recurring revenue from subscriptions more aggressively now.

Cisco has already been onan acquisitions streak, with six purchases announced in less than five months. The tech major is looking to double or triple its share of enterprise security infrastructure spend, from 9% to 20% and 30%, according to SeekingAlpha report, citing investment banking analysis from meetings with Cisco’s senior management. This would mean that the company is looking to acquire more security companies.

In July, Cisco said it will acquire point product companies to assimilate into its end-to-end architecture sales strategy, thereby consolidating the security industry, increasing its share of spend, and decreasing the number of security vendors an enterprise has to deal with.

Investment bank UBS believes Cisco will make smaller, more targeted acquisitions rather than a large one involving, for example, Palo Alto Networks or CheckPoint, the report stated. It has recently acquired domain name service security company OpenDNS for $635 million to help fill out its Security Everywhere initiative.

Robbins was on his first earnings call as CEO after taking over from John Chambers last month. The US-based company said net income rose 3.2% in its fiscal fourth quarter ended July, while revenue grew 4%. Cisco’s results topped expectations, and the company projected results for the current quarter in line with Wall Street estimates.

Cisco’s mid-year security report also revealed that cyber attacks are on the increase and becoming more complex. The firm thus urged organizations to up their security capabilities. The report analysed threat intelligence and cybersecurity trends, and revealed the critical need for CIOs to reduce time to detection (TTD) in order to remediate against sophisticated attacks by highly motivated threat actors.

The report covered two main areas; the first being Threat Intelligence, which  gave an overview of the latest threat research from Cisco and discusses issues like criminals’ increasing use of macros involving Microsoft Office, new tactics from malware authors to evade detection, risk of malware encounters for specific industry verticals, time to detection of threats, and updates on spam, threat alerts, Java exploits, and malvertising. The report discussed how a cohesive cyber-governance framework can be a step toward sustaining business innovation and economic growth on the global stage.

Other key findings include operators of crime ware, like ransomware, for which it is hiring and funding professional development teams to help them make sure their tactics remain profitable.