How CSCO’s Sourcefire Acquisition Benefited Its Security Business



Cisco is the leading player in the network security market

Cisco (CSCO) has always been a major player in the network security market. According to a report from IHS, Cisco’s share of the worldwide network security market was 30% in 4Q15. The company was followed by players such as Check Point Software (CHKP) at 15%, Palo Alto Networks (PANW) at 10%, Fortinet (FTNT) at 10%, and Juniper (JNPR) at 6%.

As more and more data are transmitted and stored through mobile devices and cloud computing, there’s a growing need for security to combat advanced cyber attacks and data breaches.

To further strengthen its position in the network security market, Cisco acquired Sourcefire in July 2013 for $2.7 billion. Sourcefire’s intrusion detection products have helped Cisco to gain business from the US government and other enterprises looking to protect their networks.

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Cisco’s network security rises 11% in fiscal 2Q16

In 2013, Cisco believed that the market would shift toward a more architectural approach. Enterprises now have 40–50 different vendors. They’re trying to figure out ways to correlate all threat information promptly to deal with threats before losing the information. Cisco has thus acquired Sourcefire and its technology. Teams have been working hard to integrate Sourcefire’s technology into Cisco’s platform.

In fiscal 2Q16, Cisco added 2,000 more customers. It now has over 10,000 customers on its security platform. Its network security business rose 11% in fiscal 2Q16, with security-deferred revenue rising 26% year-over-year.

Cisco’s advanced threat security and web security solutions also rose significantly by 180% and 40%, respectively, in fiscal 2Q16.

Cisco accounts for 3.2% of the Technology Select Sector SPDR ETF (XLK).


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