An On

By Baselinemag  |  Posted 2006-09-21 Print this article Print

Noonan, president and CEO of Internet Security Systems, says he never imagined the day would come when he'd sell the company—or, as he says, "walk my baby daughter down the aisle." But that's what Noonan is doing, with a pending $1.3 bill

-Demand Security Future?">

An On-Demand Security Future?

Q: What portion of ISS's revenue is services?

A: Managed security services is about 18% of our overall revenue. Products are about 42% of our revenue. And the rest of our revenue is in on-demand and content-type services—updates and other services. We don't have a consulting business per se. We do penetration testing; emergency response and forensic analysis; and security policy development.

Q: ISS is supposed to become part of IBM Global Services. But that doesn't mean you'll be deemphasizing products?

A: No way. If you take our products away from our business, we've got 18% of our revenue. IBM paid a hell of a premium for us, they paid four times sales as it was. If you take away our product business they paid more than 20 times sales. So here's the distinction—and it's hard, because you have to think about the future, not the past—the services we're talking about are highly automated services that have to run over our open platform. We can't run services over thin air. When we talk about the future being on-demand services, security is a control system. So you have got to have a control agent on that which you are protecting—mobile device, desktop, server or network segment.

The only reason I build boxes is that nobody would buy anything for their network that was software. Anything in-line that has be tuned better be high-availability network boxes. My customers can get that by running agents or buying Proventia, it doesn't matter to me. Cisco's closed IOS architecture, they don't let anyone play on it… Cisco's a network monopoly. But it's closed. They don't want anyone playing there.

Q: Cisco is your biggest competitor?

A: Cisco's our biggest competitor, yep. And IBM is Cisco's largest reseller. So that's created an interesting dynamic in the last two weeks.

Q: How do you walk that line?

A: Well, I think IBM has done a very, very good job walking that line. First they said, enterprise security is a critically important growth platform for IBM, whereas Cisco has built security features into the router and as a firewall business. IBM is saying, my customers at the CIO level are dealing with this strategically. The network guys will keep buying Cisco switches. IBM doesn't wish to displace that. But they wish to bring a total solution to the enterprise. I think that it's inevitable that the free market brings out competition. I think very few CIOs would tell you, "Cisco's solving my whole security problem today."

Q: But can you say that?

A: I think we are going to be able to say that better than anyone in no time flat. Why can't I say it now? There is no question, when people look under the covers at the Proventia platform and look at how it distributes across the network, we can make the claim that we have the broadest security technology offering in the industry today… We are happy to enter every single product contest we can enter, because we think if we put our name on it we view them as best of breed. Our ultimate goal is, 10 years from now, we want IBM to be able to go end-to-end with security people and say, "Don't worry about what components we're using to do this—worry about the performance. Hold us to service levels: zero infiltration of viruses and worms."

Q: IBM has its own security products. How's that all going to fit together?

A: We're going to bring that together my management and leadership and ISS, so that's going to be the integration effort. So when we talk about integration, we're not talking about taking what we have and slotting it into IBM. It's really a reverse-integration effort… That will take us about 18 months in my mind. That's ambitious, but we're working a really exciting plan with Tivoli and [ISS's] SiteProtector and making sure we're integrated at a much more detailed element level than we can from the outside looking in. But we're going to stay open to HP OpenView and BMC and others.

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