1/9/2007 -- Cisco Systems Inc. last week picked up in 2007 pretty much where it had left off in 2006 -- and 2005, 2004, 2003, 2002, and so on, and so forth.

The networking and services giant last week ponied up $830 million for IronPort Systems, a provider of enterprise messaging security products.

Analysts see the acquisition as a Very Big Deal, if only because it makes Cisco -- like Frank Zappa and his Mothers -- a sort of overnight sensation in the e-mail security segment. "The IronPort acquisition will allow Cisco to move into the fast-growing e-mail security market, which is currently valued at approximately $850 million and growing at a rate of approximately 40 percent annually," wrote Gartner analyst Peter Firstbrook. "The key technology value that Cisco will receive is a strategic foundation on which to begin building a security infrastructure for unified communications, including e-mail, instant messaging [IM] and voice over IP [VoIP]. Gartner expects Cisco to complete this strategy with more acquisitions, particularly in the IM hygiene market."

What first drew Cisco to IronPort? Firstbrook, for his part, thinks it was the latter's SenderBase Network reputation service. "Gartner expects Cisco to expand on the concept of IP reputation for all traffic types and leverage its other network components as sources of reputation information," he wrote. "This acquisition makes SenderBase the de facto reputation standard, and also gives a boost to the Cisco-supported DomainKeys Identified Mail [DKIM] standard."

In almost any acquisition scenario, there's the possibility -- indeed, the strong likelihood -- of overlap, but, in IronPort's case, Firstbrook doesn’t see all that much. "The only area of overlap is between Cisco's Content Engine Series and the recently launched IronPort S-Series. Cisco plans to continue to focus Content Engine on wide-area content acceleration for branch office applications and file transfers, while the S-Series will provide browser security in the outbound Web gateway,” he indicated. “Technology transfer to normalize the features of these lines will be the acquisition's greatest technical challenge, but Gartner sees this as a lower priority for Cisco than the integration and extension of SenderBase."

On the other hand, the acquisition could prove to be disruptive for Cisco in another very different sense: although Cisco's stewardship probably won't affect IronPort's existing partnerships, Firstbrook suggested, it will place the networking giant in direct competition with partners McAfee, Microsoft, Symantec and Trend Micro. In the end, the acquisition will probably be most disruptive for smaller players, Firstbrook maintained.

“The consolidation in the e-mail security market is now almost complete. Other vendors will find it difficult to compete with industry leaders Cisco, Microsoft and Symantec in the enterprise market. IBM and ... Juniper Networks are the only other major vendors that have a strategic interest in this market, though BorderWare and Proofpoint remain as respected independent players," he concluded. “Gartner believes the two remaining service providers, MessageLabs and Postini, will likely be acquired by telecom providers in their respective markets." -- Stephen Swoyer