Cisco this week acquired intrusion detection system (IDS) software maker Psionic Software for $12 million in stock.

The move, Cisco’s fifth acquisition this year, is aimed at bolstering Cisco’s IDS product line, which includes hardware-based appliances as well as server-based software products.

Cisco hopes to introduce new IDS products based on technology from Psionic that will reduce the amount of false alarms in IDS systems. Cisco says Psionic software could help reduce IDS false alarms by up to 95%.

This could help enterprises by allowing IT and security staff to take action only on legitimate network-based security threats instead of wasting resources and time on non-threatening network events that are misidentified by an IDS. 

IDC estimates that the security market will reach $13 billion in 2003 with almost a fifth of that revenue coming from IDS products and services.

Psionic was founded in Austin, Texas, in 1996. Its products include ClearResponse, an IDS analysis software product; and TriSentry, a suite of port scanning detection and host-based IDS tools. The company’s eight employees will move to Cisco’s VPN and Security Services business unit. Products from this group include PIX firewalls, IDS Host Sensors, as well as the 3000 and 7000 series of VPN routers, concentrators and hardware clients.