Cisco Expands Reach in Cybersecurity

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July 23 (Bloomberg) -- Cisco agreed to acquire Sourcefire for about $2.7 billion, adding anti-hacking technology used extensively by the U.S. Government. Bloomberg Industries John Butler speaks with Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

If you look at their cybersecurity business, they've been losing share their to the smaller, more nimble players.

One of the reasons is this -- one of the reasons is they have this legacy portfolio.

Firewall is a market that has been contracting.

By by sourcefire, they are acquiring buying versus building.

It's a great strategy.

He gets them into the hardest -- the hottest sector of the market without having to spend the time and will -- spending time building those new systems.

They have been growing at an accelerating pace and i don't know if it's a particular product group or a global freak out about cyber hacking.

I think it is being driven by the monster trend of cyber hacking.

It's becoming an issue, particularly in the mobile markets.

People don't look at their smart phones a computer, but the reality is they are palmtop computers and security is going to become more and more of an issue there, just as it has with the government.

Is there a suggestion that the with the cisco sales force behind those products, the growth rate might go beyond 27% year-over-year growth?

I think so.

There is a terrific opportunity here for cisco to take this product sand cross sell them with their routers, switches and wireless product portfolio.

It is a win/win all the way around in my view.

X sourcefire is an interesting virtualization security product.

Is it an important area for these guys and for cisco which has not been as active in that area?

That brings up a great point.

A lot of what we are doing now is migrating from the device level into the cloud.

You are also getting shared resources in the cloud grade by that, i mean you may be looking as a customer at storage that you rented from amazon.

Amazon may have at storage it rents to you a ross several different storage platforms -- across several different storage platforms.

Storage becomes a nightmare in the case of virtualization, so you need those products to knock-down -- to lock down those networks and give those security assurances to your customers.

Lex i did a kind of ghetto model of the sourcefire this morning.

Their government as this is a growing at 60% year-over-year rate.

They are based in maryland.

Maybe i'm wrong to put it together with the nsa, but i see the monster growth in government cybersecurity work -- are they a beneficiary of the big spend of the military technology complex?

They will be, ultimately, in my view.

First quarter was very tough in the government business.

They got hit hard by sequestration and by the fact that the government didn't have the budget at that point.

Ultimately, that business will rebound nicely particularly now that we have a budget resolution.

Anybody who reads the headlines on the security issues with the government understands that.

Sourcefire is very well- positioned to take advantage of it.

John butler, thank you.

This text has been automatically generated. It may not be 100% accurate.

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