Cisco Acquisition Portends Bigger Things

It will officially go down as acquisition No. 125 in Cisco Systems’ storied, 23-year history, but Thursday’s proposed purchase of security software vendor Securent tells the enterprise software world a lot more about where the company is headed than where it’s been.

Cisco remains the world’s largest and most important network-equipment vendor. But its recent acquisitions — particularly its $3.2 billion purchase of WebEx in March — position the company as a serious threat to top-tier enterprise software vendors as well, as the industry moves toward servicing corporate customers enamored with the burgeoning software-as-a-service (SaaS) (define) model.

The $100 million price tag for Securent, which makes policy software that regulates employees’ access to corporate database data, is a drop in the bucket for Cisco. Nor is the deal generating the same buzz or media coverage that SAP and Oracle garnered earlier this month with their respective $6 billion-plus acquisition offers (which Oracle since abandoned).

Nevertheless, enterprise customers and software vendors alike might be well served to pay close attention to how the Securent acquisition fits into Cisco’s emerging software strategy, which is already well on its way to changing the rules in the enterprise SaaS game.

Shortly after Cisco’s WebEx deal, a report from Westport, Conn.-based IT analyst firm Saugatuck Technology concluded the acquisition “will not only be a major step forward in moving Cisco up the value chain, but it will also place them front-and-center in the next generation of enterprise software.”

With Securent, Cisco continues branching out from its traditional switch-and-router business to the white-hot unified communications and collaboration software market. The move also signifies Cisco’s hopes to offer not only a one-stop shop for on-demand software applications, but also the networking backbone that supports all these browser-based applications.

The effort comes as Microsoft, SAP and Oracle are all ramping up their SaaS products and platforms to go after the lucrative and largely underserved small- and mid-sized business (SMB) market. Generally, these types of companies (and, to a lesser extent, some larger enterprises as well) either lack the budget or the patience for traditional, on-premise applications, which also entail recurring license and maintenance contracts.

As a result, they’re turning to vendors who can deliver a hosted, subscription-based model for their key business applications.

If Cisco successfully integrates WebEx, and its existing two million-plus on-demand customers, while rounding out its portfolio with software that secures and manages its disparate applications, industry watchers say the company will have a leg up on its rivals who are only beginning to embrace the SaaS model.

“If you look at what Cisco has on-premise and in the cloud, that’s what the market is arriving at,” Mike Gotta, an analyst at Burton Group, said in an interview with InternetNews.com. “It’s not either/or. You need both. You also need a client story, which is what Cisco needs. It was going to be Lotus Expeditor, but that’s not going to happen. It will be very interesting to see what Cisco does with WebEx and other acquisitions in the future.”

For now, Cisco gains Securent’s Entitlement Management Solution (EMS) version 3.0, which is based on the OASIS Extensible Access Control Markup Language (XACML) standard. The product uses strict policy enforcement to protect sensitive data for Oracle Database and Microsoft SQL Server. In layman’s terms, it ensures the CEO’s administrative assistant can get access to the boss’s calendar — but not human resources’ payroll database.

“Securent’s software offers enterprises a single point of control to define and manage entitlements across applications and data,” Don Proctor, senior vice president of Cisco’s collaboration software group, said in a statement.

“As enterprises shift to service-oriented architectures and adopt technologies such as unified communications and Web 2.0-based collaboration, there is a rising need for control over access to distributed enterprise resources.”

EMS comes either in a Linux appliance, or strictly as a software package supporting both Java and .NET. It runs on standard J2EE software servers, including WebSphere, WebLogic and open source stacks. It also runs on Windows, Linux and Unix machines.

The software’s flexibility and functionality made Securent a prime takeover or merger candidate for several leading software vendors, including Oracle.

Cisco said the deal is expected to close by January. Based in Mountain View, Calif., with development operations in Hyderabad, India, Securent has 57 employees and will be folded into Cisco’s collaborative software group.

This article was first published on InternetNews.com.

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