NAI Acquires IntruVert for $100 Million

Network Associates says IntruVert's IntruShield intrusion prevention solution will complement its security products.

Shaking off its recent accounting woes, Network Associates Inc. on Wednesday paid $100 million in cash to acquire IntruVert Networks, a 2-year-old startup that sells intrusion prevention solutions.

IntruVert, based in San Jose, Calif., has a line of intrusion prevention appliances, known as the IntruShield, that combine denial-of-service protection with signature and anomaly based attack detection. NAI executives say the technology will complement the companys existing catalog of anti-virus, firewall and other products.

IntruVert is the second intrusion prevention vendor to be acquired in the last few months. In January, Cisco Systems Inc. agreed to pay $154 million in stock for Okena Inc. That transaction is expected to close in the next few weeks.

Intrusion prevention technology has become the hot ticket in the security industry of late as IT departments have become more and more frustrated and disillusioned with their traditional intrusion detection systems. Those systems propensity for spewing false positives has led many security specialists to either tune them to a very low sensitivity threshold or disable them altogether.

As a result, companies such as Okena and IntruVert, whose technology is capable of not only detecting but stopping attacks as they happen, have found themselves in the right place at the right time.

NAIs purchase of IntruVert is its largest acquisition in five years and was the end result of a process that began last summer. After developing a strategic plan that called for the company to acquire an intrusion protection technology, NAI executives went shopping.

"We looked at everything. In July, when the board approved the strategic plan, we started looking at intrusion protection companies," said Sandra England, executive vice president of corporate development and strategic research at NAI, based in Santa Clara, Calif. "We brought in every product in this space and put them in our lab and ran tests on them and really thought that IntruVert had the best technology."

Initially, NAI will sell the IntruShield appliances in much the same way that IntruVert has. But over time, England said she expects some of the management capabilities in the McAfee Security and Sniffer Technologies products to be integrated into the appliances as well.

"Were going to use this hardware for other applications," she said. "It has a lot more potential uses than just intrusion protection."

An interesting subplot to the IntruVert acquisition is its potential effect on NAIs partnership with Internet Security Systems Inc. ISS uses NAIs virus-detection engine in some of its products and often competes head-on with IntruVert on enterprise sales calls.

"Im sure there will be some effect, but from our perspective, we felt that for us to fulfill our vision for customers we needed a leading-edge technology and we needed to own that technology," England said. "Theres only so much you can do in a partnership."

She added that she expects the ISS partnership to continue. "There are definitely still ways that we can work together," England said.

The IntruVert acquisition comes a week after NAI announced that it would restate three years of earnings as a result of information turned up in investigations of the companys accounting practices by the Securities and Exchange Commission and the Department of Justice. NAI will revise its earnings for 1998, 1999 and 2000.

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