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Cisco Tightens The Net
Quentin Hardy, 05.03.05, 12:01 AM ET

NEW YORK - Computer networking giant Cisco Systems is making good on its promise to better manage threats to corporate networks and plans to introduce a product that could threaten a lot of smaller players.

On Tuesday, at the Network & Interop trade show in Las Vegas, Cisco (nasdaq: CSCO - news - people ) Chief Executive John Chambers will announce the company's new breakthrough: a new device that puts up to 18 different security and network management functions, from detection of unwanted intruders to keeping employees off data-intensive free music-downloading sites such as Kazaa, all one on single box. Many of these functions are currently performed inside a data center with separate machines, which take up valuable floor space and budgets.

The Cisco device, called the Adaptive Security Appliance 5500 series, lists for about $3,000 to $17,000 a box depending on the speed of data packets it is managing. Cisco expects customers to start with a few security applications to begin with, but they can add applications and future functions to the device for additional cost.

The product may impress customers while causing a headache for so-called "point product" software companies that offer one security solution or even specialize in a few, such as Checkpoint Software (nasdaq: CHKP - news - people ) and Symantec (nasdaq: SYMC - news - people ). Juniper Networks (nasdaq: JNPR - news - people ), Cisco's top competitor in the U.S., purchased security company Netscreen last year and is incorporating that company's products in its machines. The latest Cisco move may drive Juniper to make even more acquisitions, furthering consolidation of the industry.

"We put a lot of hooks into it, the ability to run multiple processes and have enough storage and memory," said Jayshree Ullal, senior vice president of Cisco's security and technology group. "Nobody has integrated this many security functions--from virtual private networks, firewalls and intrusion prevention and VoIP [voice-over-Internet Protocol. For example, Internet phone calls] security--in one form factor, on one platform." From here on, point product companies "will have to move to the next generation" of security software, she predicted.

Aside from what it says is a lower purchase price, Cisco hopes to sell the ASA 5500 boxes on the basis of lower management costs. This one device can add security features to perhaps 10,000 personal computers at once, dramatically cutting cost and time associated with securing PCs one at a time.

Cisco's security group is the first of Cisco's "next generation" businesses (others include wireless and VoIP systems) to reach over $1 billion in revenue--Chambers' minimum threshold of success. Ullal said the security business is growing 25% to 30% annually and is increasingly a mainstream business for Cisco. Up to 40% of Cisco's switches and routers now come with built-in computing and security functions, she said, up from zero two years ago.

The ASA 5500 is the first in a series of new products stemming from an initiative designed to approach Internet security in a more systemic way, which Cisco announced in February. Previously the company had offered software upgrades to provide better defense against things such as spyware, as well as to offer better network control capabilities. Future products are expected to keep consolidating more of these functions into singe devices.

Expect Cisco to leverage its expertise in both hardware and software to build a stronghold that will become increasingly difficult for smaller companies to penetrate.

http://www.forbes.com/technology/2005/05/03/cz_qh_0503cisco.html?partner=yahootix&referrer=

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