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Cisco wraps up network security buyout

The networking giant completes its purchase of software maker Okena, a move that boosts Cisco's presence in the network security market and could help fend off hits from rivals.

Cisco Systems completed its purchase of security software company Okena on Friday, another sign the networking giant is continuing to buy its way into new niches to armor itself against rivals.

The San Jose, Calif.-based company indicated that it will sell Okena's software, which identifies malicious code in digital communications between network software systems, alongside new security hardware meant for Cisco's Catalyst 6500 line of data switches.

With the addition of Okena's software, Cisco believes that it will offer its customers "the most comprehensive network security threat protection portfolios for securing large corporate networks," the company said Friday.

Cisco had announced in January that it would buy the privately held Waltham, Mass.-based software maker in a deal valued at $154 million.

Despite a slowdown in spending by corporations in general, Cisco appears to be picking up its pace of buyouts in 2003. The networking giant uses acquisitions to expand into new markets, CEO John Chambers has explained in the past.

The networking leader sells more switches and routers--the workhorses of networking--than any other company on the planet. But analysts say that network equipment makers offering lower-priced gear will eventually eat away at its sales, so the company needs to find new products to make and sell.

"Cisco will continue to consider disciplined acquisitions," a spokesman said Friday. "We're going to greater lengths to make sure they will create substantial value for our customers and shareholders."

The Okena deal closes only a few weeks after Cisco announced its intention to spend more than $500 million for two companies: SignalWorks, a software company that specializes in Internet phone technology, and Linksys, a maker of networking gear for consumers.

Cisco purchased 23 companies in 2000, two in 2001 and five in 2002.