IBM to pay $US1.3b for Internet Security Systems

Stuart Corner
Monday, 28 August 2006 06:55

IT Industry - Deals

In a move that will greatly increase its position in the security market, IBM is to acquire, subject to shareholder approval, publicly-listed global security specialist Internet Security Systems (ISS), one of the world' leading providers of IT security services and systems to governments and major corporates for approximately $US1.3 billion, $US28 per share.
IBM says the acquisition will advance its strategy "to use IT services, software and consulting expertise to automate labour-based processes into standardised, software-based services that help clients optimise and transform their businesses...[and] reinforce IBM's position in the rapidly growing area of managed security services."

ISS has more than 11,000 customers worldwide including 17 of the world's largest banks, 15 of the largest governments, 11 of the top public insurance companies and 13 of the world's top IT organisations. The ISS global network of security operations centres (SOCs), which include sites in Tokyo, Brussels, Brisbane, Detroit and Atlanta, will be added to IBM's existing global network of SOCs. IBM security consultants and global sales force will also offer ISS's line of security appliances and software.

Following completion of the acquisition, IBM says it intends to:
- Establish ISS' operations as a business unit within IBM's Infrastructure Management Services unit, part of IBM Global Technology Services;
- Integrate ISS' software technology with Tivoli's IT service management portfolio, which includes software for Identity management, access management, service oriented architecture (SOA) security and security information management;
- Market and sell ISS's managed security services and portfolio of network, application, server and endpoint protection products through IBM's and ISS's worldwide sales channels and business partners;
- Further expand the scope and capabilities of IBM's business and IT asset management consulting practices, and deliver services for ISS-based solutions through IBM Global Services.