Cisco has announced its intention to acquire Duo Security for $2.35 billion.
Duo Security had raised $121 million in venture capital funding since its foundation in 2010, and in September 2017 was valued at approximately $1.17 billion.
The company’s unified access management and multifactor authentication solutions, used by thousands of customers including Etsy, Yelp, and Facebook, will be integrated into Cisco’s network, device and cloud security platforms.
By joining forces with the world’s largest networking and enterprise security company, we have a unique opportunity to drive change at a massive scale, and reshape the industry.
– Dug Song, CEO and co-founder, Duo Security
“In today’s multicloud world, the modern workforce is connecting to critical business applications both on- and off-premise,” said David Goeckeler, executive vice president and general manager of Cisco’s networking and security business. “IT teams are responsible for protecting hundreds of different perimeters that span anywhere a user makes an access decision. Duo’s zero-trust authentication and access products integrated with our network, device and cloud security platforms will enable our customers to address the complexity and challenges that stem from multi-and hybrid-cloud environments.”
The deal is expected to close in the first quarter of Cisco’s fiscal year 2019. Duo Security will continue to be led by current CEO and co-founder Dug Song, and will join Cisco’s Networking and Security business led by Goeckeler.
“Our partnership is the product of the rapid evolution of the IT landscape alongside a modernizing workforce, which has completely changed how organizations must think about security,” said Song. “Cisco created the modern IT infrastructure, and together we will rapidly accelerate our mission of securing access for all users, with any device, connecting to any application, on any network. By joining forces with the world’s largest networking and enterprise security company, we have a unique opportunity to drive change at a massive scale, and reshape the industry.”
Best known for hardware, Cisco has made several moves over the past few years to expand its presence in the cybersecurity space.
As well as offering its own security products, over the past few years it’s made quite a few acquisitions, as we discussed recently – 29 companies since 2015 (30 including Duo, though the deal hasn’t closed yet), approximately 2/5 of which are explicitly security-related, and most (if not all) of which have potential security applications. The company said in a call with investors and the media that its acquisition of Duo Security is part of a strategy to offer more subscription-based cloud security solutions.
“We continue to rapidly innovate in security to address key areas of concern for our customers such as security in their complex data centers,” said CEO Chuck Robbins.
Cisco’s security business grew 11% in the company’s third quarter this year, which is almost triple its overall growth rate. However, security still accounted for less than 5% of total sales, suggesting that its reputation as a networking and router provider above all may be hard to shake.