Partners To Cisco: Forget FireEye, Look At Palo Alto, Splunk

Looking Beyond FireEye

The Cisco partner community was abuzz last week following rumors that the networking giant had put in a whopping $9 billion bid to acquire advanced threat detection company FireEye.

Although the rumor was doused by Cisco CEO John Chambers last Wednesday during the company's third-quarter financial results call, it got Cisco channel partners musing about the security companies they think Cisco should buy.

CRN checked in with several Cisco Gold partners to get their predictions for its acquisition future. Partners told CRN Cisco's bread-and-butter M&A strategy is snatching up smaller companies it can integrate into its own product lines rather than going after a larger company like FireEye, which could be trickier to integrate, but that doesn't mean they don't want the company to think big. Here are 5 companies partners Cisco said it needs to keep in mind for its next security purchase.

Illumio

CEO: Andrew Rubin

One of the first companies to come to mind for several partners as a potential Cisco acquisition target was the Sunnyvale, Calif.-based security startup Illumio. The company, which provides protection for data centers and cloud services, would be a "perfect integration" for Cisco, said a top executive at one CRN SP500 company, who declined to be named.

"FireEye is outside Cisco's comfort zone; it's a big cost, and it'll be hard to make it pay off," said the executive. "[Illumio] actually looks at what's going on in the physical processors or cores that might indicate that there's a security breach, so it's very complimentary to what Cisco does."

The red-hot startup racked up $100 million in a Series C funding round last month. Illumio executives said in a statement at the time that they will use the funds to meet increased demand for the company's Adaptive Security Platform, which provides visibility into live traffic, can enforce precise security down to individual workloads and processes, and instantly encrypts data.

Splunk

CEO: Godfrey Sullivan

With Cisco's increased focus on software, security and big data, the rising star known as Splunk would be a "huge win," said a top executive solution provider who is a Cisco gold partner. Splunk, the San Francisco, Calif.-based provider big data and security intelligence software reported revenue of $450.9 million in fiscal 2015, up nearly 50 percent from the prior year.

"Being software-based, it would allow Cisco to rapidly integrate them into the things they already do," said a top executive of another Cisco Gold partner. "I don't think Cisco needs more security products as much as, if they were going to acquire, they would go get a technology to drop into their existing products."

LogRhythm

CEO: Andy Grolnick

Partners pointed to LogRhythm's log management capabilities and Security Intelligence Platform geared toward enterprise customers as reasons the Boulder, Colo.-based company would be a great match for Cisco.

"Cisco has a ton of different devices for the log files, routers, switches, things like that and [LogRhythm] does inspection of log files – it's one that might make sense," said the Cisco Gold partner.

Last week, LogRhythm appointed security veteran James Carder, formerly of Mayo Clinic, as its chief information security officer and vice president of LogRythem Labs.

Blue Coat Systems

CEO: Greg Clark

One of Cisco's rivals mentioned by solution providers as a good acquisition choice was Blue Coat Systems, a Sunnyvale, Calif.-based security and WAN optimization specialist.

Partners pointed to Blue Coat's acquisition of network forensics and monitoring application maker Solera Networks and the sandboxing technology maker Norman Shark as valuable reasons why Cisco should pounce sooner rather than later.

"[Cisco] could definitely use [Blue Coat's] big install base," said a top executive from a Cisco partner in the Northeast. "FireEye would make Cisco a bit more credible as a security brand, but it would take a while to fine-tune the integration compared to what I think could be a quicker Blue Coat [integration]."

Alert Logic

CEO: Gray Hall

Cisco is pushing its channel community to build more cloud and services solutions and capture recurring revenue streams, and as a Security-as-a-Service provider, Houston-based Alert Logic is right up that alley.

"Cisco has made solid moves in the security space. The only hole in their offering would be something like Alert Logic," said a top executive from a Cisco solution provider in the Southeast. "Alert Logic provides the full [Security Operations Center] functionality, plays well at the top end of the security stack ... it would add a lot of weight to their security services portfolio."

Alert Logic acquired the Dallas-based security company Critical Watch earlier this year.

Palo Alto Networks

CEO: Mark D. McLaughlin

Partners know it would be a long shot given the high price tag, but Palo Alto Networks, Cisco's biggest security rival, is definitely on everyone's mind. Palo Alto's market capitalization sits at close to $13 billion. With Cisco's war chest of over $54 billion as of the end of April, it's not out of the realm of possibility that it could engineer a mega-deal, which might be just what the networking giant needs to truly become the leading brand in the red-hot security market.

"It's going to be so difficult to trump everything Palo Alto is doing," said one of the solution provider executives. "Heck, Chambers said he wanted to take 40 percent of the security market, this is one that would cut down the time it takes to get there tenfold. They spent [nearly] $3 billion on SourceFire, the $9 billion for FireEye didn't seem too out there, is it that far out there? I mean, who knows what Chuck [Robbins'] plan is?"