Cisco Systems Friday agreed to acquire privately-held network security software maker Okena for $154 million in stock.

Cisco, looking to bolster its intrusion detection software offerings, fixed its sights on Waltham, Mass.-based Okena's network security software, which serves as a frontline combatant to malicious behavior on desktops and servers. The company's flagship product, StormSystem, identifies known and unknown security risks in a system by analyzing the operating system, file system, configuration, registry and network requests.

With the new products, San Jose's Cisco will try to lure businesses sporting large corporate networks to its side. Okena said its technology differs from conventional desktop and server security products because, rather than relying on signature-based techniques, Okena technology intercepts all operating system, file system, configuration, registry, and network requests, to prevent mischief.

Okena's security software aggregates security functions, including Host-based Intrusion Detection (HIDS), distributed firewall, malicious code protection and operating system lockdown into one system. Okena protects against Day Zero viruses and worms.

Richard Palmer, vice president and general manager, Cisco Virtual Private Network and Security (VSEC) Business Unit, said the play is part of a "significant initiative to more tightly integrate network and endpoint security."

IDC analyst Charles Kolodgy said the purchase was interesting because it will enable Cisco to focus on behavioral aspects and policy creation for the desktops, or endpoints, as they call them. For example, Okena's technology technologies enforce authorized application behavior to allow acceptable business activity.

"The difference between Okena and the intrusion detection Cisco is OEMing is that they create better policy," Kolodgy said. "One of the core areas Cisco wants to focus on is storage, and Okena's products -- StormWatch, StormFront and StormTrack will help with that. So, this will help to create a better management of Cisco products, and these agents can be into routers and other devices, not just the servers. It's also interesting because it seems Cisco is getting more into the software area of network security by getting down to the desktop."

Okena's 52 employees will join the Cisco Virtual Private Network and Security Business Unit under the direction of Palmer.

Under the terms of the agreement, Cisco will swap $154 million in common stock for all outstanding shares and options of Okena. Cisco expects a one-time charge for purchased in-process research and development expenses not to exceed a penny per share. The acquisition of Okena is expected to close in the third quarter of Cisco's fiscal year 2003.