Cisco Systems’ announcement that it will acquire IronPort Systems, Inc. of San Bruno, CA, on January 4, 2007, could add a new dimension to the networking leader’s arsenal.

IronPort is more than just a leading provider of messaging security appliances that combat spam and spyware. It continuously updates its appliances via a service delivery capability which gives Cisco a new managed security services capability.

Managed security services (MSS) have grown in popularity over the years as the rate of new security threats has escalated. Historically, organizations have had to dedicate their inhouse staff to the endless task of continuously battling the latest security threats. Now, an increasing proportion of organizations, both corporations and government agencies, are recognizing that it makes more sense to enlist the help of specialized firms with greater security expertise and experience to perform this function. This permits the enterprises to redirect their limited inhouse resource toward more strategic, business-oriented responsibilities.

According to a recent THINKstrategies survey of 550 IT professionals, conducted in conjunction with Business Communications Review and CMP, found that over a quarter (26%) are already using a MSS and another 20% are considering one.

The rapid growth of MSS has attracted an expanding array of players to the market via acquisitions of specialized managed security service providers (MSSPs) including Symantec who acquired @stake, Verisign’s purchase of Guardant, IBM’s acquisition of Internet Security Systems (ISS) and BT’s recent acquisition of Counterpane.

These acquisitions also show how a growing number of traditional, product vendors are also recognizing that they need to expand their portfolios to more fully satisfy their customers’ changing needs. Rather than simply accept a rapid response to problems, customers today expect their vendors to help them mitigate the risks of issues arising that can disrupt their business operations.

In response, nearly every vendor is offering a broadening set of managed services. IBM is now offering remote desktop and back-up services to go along with its managed security services, as is HP. EMC is offering remote storage services to complement its MSS. Many of these companies have also entered the market via acquisition.

In the networking arena, Lucent/Alcatel, Avaya and Siemens are all offering a variety of managed services, especially around IP communications. In addition, all of the service providers (xSPs) and many value-added resellers (VARs) have added managed services to their portfolios.

The managed services business is also being fueled by the parallel growth of the Software-as-a-Service (SaaS) movement. Just as IT professionals are tired of the day-to-day hassles of managing IT, they are equally fed up with the frustrations associated with deploying and administering traditional software applications, including management software packages.

This has opened the door for a new generation of IT management vendors with SaaS solutions to enter the market, such as Klir Technologies. Even Microsoft is escalating its managed service and SaaS efforts to respond to escalating customer demands for more reliable and secure operating systems and business applications.

The rapid rise of managed services and SaaS has not gone unnoticed by Cisco. It acquired NetSolve, a pioneer in the managed services market, in 2004. However, Cisco has yet to rollout any managed services of its own as a result of that acquisition.

Part of Cisco’s hesitancy to unveil a set of managed services is its reliance on its channel partners to sell and support its products. Rather than create a potential conflict with its partners by offering its own set of managed services, Cisco has used the NetSolve transaction to better understand the managed services business, so it can better support its xSP and VAR partners’ managed services efforts.

While Cisco may be more knowledgeable about the nuances of the managed services business now, it has also been slow to produce a clear, managed services strategy. With the IronPort acquisition, Cisco not only fortifies its security capabilities, it also strengthens its managed service delivery capabilities.

The representatives of IronPort I’ve talked to believe this acquisition will inspire Cisco to finally support its own set of managed services. While I believe these services will be primarily sold and delivered through Cisco’s channel partners, I expect many of Cisco’s major customers to demand that Cisco also sell and deliver it directly to them as well.

You can find a listing of MSSPs on THINKstrategies’ Managed Services Showplace and SaaS-oriented IT management solution providers on our SaaS Showplace.