Q&A: Tom Noonan, President and CEO of ISS

Tom 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 puts it, “walk my baby daughter down the aisle.”

But that’s what Noonan is doing, with a pending $1.3 billion acquisition by IBM of the intrusion detection system and services vendor (see IBM to Buy ISS for $1.3B). Big Blue expects to retain all of ISS’s 1,350 employees and operate the company as a subsidiary under the IBM Global Services business unit.

And Noonan says IBM has aggressive plans for ISS, pushing ISS’s product road maps from 2008 through 2010 up to next year. That means growing ISS from 1,350 to at least 1,600 employees. “It’s almost like we’re going to have a bubble here at the beginning of this,” says Noonan.

Last week, Noonan sat down with Baseline editor-in-chief John McCormick, executive editor Anna Maria Virzi and news editor Todd Spangler to discuss the deal, and what it means for customers. What follows is an edited transcript of the conversation.

Q: So when do you get your IBM cards? [Noonan has just handed out business cards embossed with the ISS logo]

A: Yeah, I gotta get those. Well, I wore the blue suit and got a haircut. But they said, “We don’t wear blue suits anymore.” They really did say that in a meeting with employees.

Q: When does the IBM deal close?

A: I am being told it’s set to close sometime around the 23rd of October. I think by and large, by the end of October, we’ll be part of IBM.

Q: How did the deal get initiated?

A: The deal really has its roots in a partnership that we had established with IBM going all the way back to 1999. That began as an arms-length partnership and began to grow and grow. The catalyst for it came from a deep strategy undertaking that [IBM CEO] Sam Palmisano undertook over the last year, basically which identified enterprise security as one of the top five growth platforms for IBM. From that strategy work, they went out and evaluated a whole bunch of companies… They approached me in the springtime [of 2006] and made it very clear they had done their homework and had done a thorough and comprehensive review of the marketplace. They felt we were the company that could be the foundation of their security business…

After 12 years… I never thought I would get to the day where I wanted to walk my baby daughter down the aisle and put her up on the altar. But this seemed like the perfect marriage. They wanted to run [ISS] independently. They said they wouldn’t do the deal unless I stayed and was able to retain the management team to run this. They’re going to keep our brand in the marketplace.

One of the toughest things we had to do on the announcement is convince our customers and our market analysts that IBM wasn’t going to chop this up into the hardware business, the software business, the services business, and then tell the sales force, “Go sell security.” They actually believe the real value of the company is in the unique way that we’ve integrated it at the customer.

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