Cisco Systems is to acquire web security software company ScanSafe for $183 million (£110.6 million). James Harris meets the company’s founders
Cisco Systems is to acquire web security software company ScanSafe for $183 million (£110.6 million). James Harris meets the company’s founders
ScanSafe was founded in 2004 by brothers Eldar and Roy Tuvey and pioneered the use of Software as a Service (SaaS), providing services online as opposed to on-premises software products, in the web security space.
Roy, who is president of ScanSafe, says: ‘[Our products] reduce maintenance costs, as we look after the system, and they provide better security. It took a long time to persuade people to adopt this approach, and then it took off.’
It is estimated that the web security market will be worth $2.3 billion by 2012. ScanSafe CEO Eldar says: ‘There’s great acceleration in the market. We felt that we were operating in the small sphere and we wanted access to larger companies.’
The company has managed to escape the brunt of the recession, but it has been affected: ‘We’ve been through some tough technology climates. The dotcom crash was a big shock, but a lot of companies that came out of that have become great businesses. The recession gives people an opportunity to see the businesses that can flourish under difficult conditions, and we’ve managed to double our revenue year-on-year,’ says Roy.
ScanSafe has been approached by ‘several suitors,’ all of which they turned down, until Cisco came along. Eldar says: ‘We were eligible and the time was right. In terms of distribution, expertise, brand name and the resources that Cisco could bring to bear, it was a great opportunity to take the company to the next level.’
In addition to the acquisition of ScanSafe, last month Cisco acquired IT infrastructure company Starent Networks for $2.9 billion and Norway-based video communications business Tandbeg for $3 billion. Roy says: ‘The deal was done in cash. They have $32 billion sitting in the bank, so they can afford it.’
According to Roy, the company’s accumulated deal experience led to a smooth negotiation process: ‘Cisco has handled 130 acquisitions. It’s a well-oiled machine, so there were no surprises along the way.’
The deal is expected to close by the second quarter of 2010. On completion, the ScanSafe team will be integrated into Cisco’s security technology business unit, reporting to vice president and general manager Tom Gillis.
