IBM Acquires Internet Security Systems

In order to snag a piece of the rapidly expanding Web security industry, IBM has acquired Internet Security Systems for $1.3 billion, a move designed to bolster its IT security portfolio. The acquisition of ISS also continues Big Blue's recent buying spree -- the purchase is its fourth in just this month alone.

ISS provides security services to companies and government agencies, which include both applications and appliances that alert of break-ins, as well as provide virus and malware detection. The purchase additionally falls in line with IBM's new strategy of transforming itself into a services-based business.

Most of the more profitable businesses are in the services industry, and the majority of IBM's acquisitions, especially recently, have fallen into this category. The company has said in the past that it was transitioning its business to provide a better mix of services, consulting and hardware to increase profit margins.

"ISS is a strategic and valuable addition to IBM's portfolio of technology and services," IBM Global Services' Val Rahmani said. "This acquisition will help IBM to provide companies with access to trained experts and leading-edge processes and technology to evaluate and protect against threats and enforce security policies."

The company is the only one of its kind that offers protection remotely through a network of datacenters. Teaming with IBM would bring ISS' services to a much larger audience, and analysts have called the acquisition a logical step for the company that could end up being very profitable.

ISS already has a customer base of about 11,000, including 17 of the world's largest banks, 15 of the largest governments, 11 of the top public insurance companies and 13 of the world's top IT organizations. The company's products would be sold through IBM's Tivoli software division and its services through IBM's Global Services unit.