Cisco will pay about $183 million in cash and retention-based incentives for the firm, which is based in London and San Francisco and serves both global enterprises and small businesses. The acquisition is expected to close in the second quarter of Cisco's fiscal year 2010.

"With the acquisition of ScanSafe, Cisco is executing on our vision to build a borderless network security architecture that combines network and cloud -based services for advanced security enforcement," said Tom Gillis, vice president and general manager of Cisco's Security Technology Business Unit. "Cisco will provide customers the flexibility to choose the deployment model that best suits their organization and deliver anytime, anywhere protection against web-based threats."

Hybrid-Hosted Web Security

Web security is a large and expanding market that Cisco expects to grow to $2.3 billion by 2012. By acquiring ScanSafe, Cisco said it's building on its successful acquisition of on-premise content security provider IronPort.

The acquisition brings together the Cisco IronPort high-performance web security appliance and ScanSafe's SaaS security service. Cisco said the combination will expand its security portfolio to offer superior on-premise, hosted and hybrid-hosted web security solutions.

"ScanSafe pioneered the market for SaaS web security and continues as a leader in this rapidly growing market," said ScanSafe CEO Eldar Tuvey. "At a time when enterprises are increasingly focused on a flexible and mobile workplace, the need for hybrid-hosted web security solutions is greater than ever. By joining the Cisco team we will be able to offer even better and more flexible protection to our customers."

Cisco's Cloud Strategy

ScanSafe's service will be integrated with Cisco AnyConnect VPN Client to provide a secure mobility solution. Cisco said ScanSafe's global network of carrier-grade data centers and multi-tenant architecture will enhance its ability to provide new cloud-security services for customers anywhere in the world.

"The cloud is a big part of Cisco's strategy. The biggest inhibitor to people using the cloud more is security. ScanSafe is a security platform for cloud-based opportunities. It's a good acquisition for them," said Zeus Kerravala, a vice president at the Yankee Group. "Cisco has been in security for a long time, but it's primarily been premised-based deployments. ScanSafe will help Cisco with its cloud strategy."

Is Cisco leveraging a down economy to scoop up smaller companies at bargain-basement prices? As Kerravala sees it, it's a buyer's market and Cisco has the cash to make acquisitions of companies that can't get the same multiples they expected in an up market.

"For companies with cash, like Cisco, there is a great opportunity to add to their portfolio at a relatively moderate price," Kerravala said. "For what Cisco has in the bank, $183 million is pocket change."