January 5, 2007

David and Richi on Cisco and Ironport

The Ferris Research lads offer a succinct analysis of the Cisco/Ironport deal. As an old software stock analyst, I was particularly struck by their estimates that A. Cisco paid over 10 times revenue for Ironport and B. Ironport’s revenues weren’t growing. Even more interesting in my opinion is what Richi said to me by e-mail in response to a query, namely (emphasis mine):

Yes, clearly IronPort’s reputation data is part of the prize for Cisco. …

An interesting question is what will happen (if anything) with SpamCop. IronPort deliberately ran SpamCop at arm’s length as a matter of policy. I wonder if Cisco will maintain that policy. SpamCop is of course part of the raw data feeding into SenderBase, along with the data phoned home by the IronPort boxes.

As we’ve seen with the BlackSpider acquisition by SurfControl, spam control companies that aggregate lots of data about spam sources are valuable, for reasons in addition to spam control. If a zombie is sending spam, it’s also probably a potential source of other bad stuff, such as worms and DDoS connections.

Quite possibly, one of Cisco’s goals (dreams?) for this acquisition is to put a whole lot of sender policing into the network infrastructure. Mainly, that’s a good thing — but like most kinds of internet policing, that technology also has the potential for abuse.

In that vein, I note that the Ferris guys say Ironport’s big competitor was Ciphertrust, acquired by Secure Computing. Well, in my opinion Secure Computing are bad guys, or at least were as of my research a few years ago. They have long helped enforce nationwide Web censorship in Saudi Arabia; they got dinged by the SEC for early for CEO stock hyping/selective disclosure; they in my opinion were guilty of a lot more hyping than that; and for the cherry on top of this ethical sundae, CEO John McNulty has a resume in Secure’s SEC filings that is inconsistent with the SEC filings of a previous employer.


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