For the third week in a row, IBM has spent in the neighborhood of a billion dollars on software acquisitions. This time it's the upscale neighborhood of $1.3 billion cash, which is what it intends to lay out for Internet Security Systems (ISS) in the name of IBM Global Services. Services hasn't been doing as well as IBM's software arm lately. ISS' product line will also be integrated into Tivoli's management portfolio such as identity management, access management, SOA and security part.

The $28-a-share price represents a 7.7% premium, narrow because the company's stock rose on whispers of a deal going down. It earned $38.5 million on revenues of $330 million last year. It's pushing revenues of $350 this year though second-quarter profits dropped 25%.

The publicly held Atlanta-based concern, whose security solutions IBM describes as proactively protecting networks, desktops and servers against Internet threats, uses a belt-and-suspenders approach of software, appliances and X-Force services that monitor and manage network vulnerabilities and exploits. It's supposed to respond in advance of potential threats.

IBM said the stuff is used by 11,000 accounts, including 17 of the world's largest banks, 15 of the largest governments, 11 top public insurance companies and 13 top IT organizations. IBM reportedly wants the customer base and ISS' service skills more than the technology per se.

IBM says the acquisition will advance its strategy of automating labor-based processes into standardized software-based services, not to mention adding to its Managed Security portfolio. ISS talks about it as the foundation for "security-as-a-service."

Expectations are the deal will close in Q4. ISS will become a business unit within IGS' security organization under its present CEO Tom Noonan. ISS has security operations centers in Tokyo, Brussels, Brisbane, Detroit and Atlanta.

ISS was started in 1994 by Georgia Tech dropout Christopher Klaus. It competes with McAfee, Symantec and Check Point and potentially HP. Business 2.0 thinks HP should buy Symantec.