Cisco to buy OpenDNS for $635 mln to boost security business

30 Jun 2015 | Author: | No comments yet »

Cisco Acquires OpenDNS for $635 Million.

Continuing its efforts to profit from growing corporate cybersecurity spend and keep fast-growing upstarts (Palo Alto Networks, FireEye, etc.) at bay, Cisco is acquiring OpenDNS, a provider of cloud-based cybersecurity software and services (e.g. malware/phishing-protection, Web filtering, threat intelligence) that revolve around handling and analyzing domain name requests.

The deal is set to close in the first quarter of Cisco’s fiscal 2016, with OpenDNS staff set to become part of the Cisco Security Business Group organization run by David Goeckeler, senior vice president and general manager. The combination of Cisco and OpenDNS will enhance threat protection before, during and after an attack. “As more people, processes, data and things become connected, opportunities for security breaches and malicious threats grow exponentially when away from secure enterprise networks,” said Hilton Romanski, chief technology and strategy officer of Cisco. The $635 million will be paid in cash and assumed equity awards, plus retention based incentives for OpenDNS, according to information supplied by Cisco. OpenDNS gives Cisco, a network vendor that offers more traditional network edge protection, a Software as a Service vendor that provides security on the move to any device, anywhere, anytime.

Your feedback and support helps us build world-class security services, and frankly, it’s what motivates us each and every day to deliver security solutions to keep you and your company secure. The purchase builds on Cisco’s strategy to add a cloud security layer, according to a blog post by Hilton Romanski, who leads business development at Cisco. “The acquisition will extend our ability to provide customers enhanced visibility and threat protection for unmonitored and potentially unsecure entry points into the network, and to quickly and efficiently deploy and integrate these capabilities as part of their defense architecture,” Romanski wrote in in his blog post. The company claims 65M+ users, including workers at “thousands of companies from Fortune 500’s to small businesses.” It handles over 60B daily DNS queries requests (over 2% of all global requests).

David Ulevitch, founder and CEO was up early this morning and clearly excited about the deal, but was unwilling to comment on the story, referring me to the Cisco communications people. According to OpenDNS it has 65 million users today around the world. “Cisco loves OpenDNS, too, and has been an investor in the company and supporter long before this deal was announced,” OpenDNS wrote in an FAQ. “We are still selling and supporting our products. We’re all on the same page here, committed to making sure that what makes OpenDNS so great stays intact, and that includes the team.” “The old cliché of “better together” applies very aptly here, and building incredible security solutions together is a major motivation for the deal,” the FAQ states. Cisco: “Combining OpenDNS’ broad visibility, unique predictive threat intelligence and cloud platform with Cisco’s robust security and threat capabilities will increase awareness across the extended network, both on- and off-premise, reduce the time to detect and respond to threats, and mitigate risk of a security breach.” The company recently outlined a security strategy focused on embedding security features throughout its hardware lineup, as well as protecting endpoints.

The acquisition could pose a challenge to DNS and IP address management hardware/software vendor Infoblox (NYSE:BLOX), which has been growing its security exposure. It works by simply blocking bad traffic and allowing good traffic to flow, thereby acting as a protective layer between the user and the Internet, Ulevitch explained at the time.

In Cisco’s words: “This level of service for all users is a priority.” We’re very excited for what the future holds, and we’ll share more about that in the coming months. Below, I have included an email I sent earlier this morning to the incredible team we have here at OpenDNS that provides more details on this partnership with Cisco. Because this is a really big deal and Cisco is a public company, I unfortunately wasn’t able to talk about it with all of you before the news hit the wires.

Other companies have approached us in the past, and when Cisco initially presented us with an offer, while flattered, we didn’t think it would progress further than previous similar discussions. Third: We believe we can move faster and with more impact by leveraging Cisco’s scale and resources in a way that we would be unable to do on our own or with any other partner. Whether you have been here for five years or five weeks or five days, the company that you joined was the right one, and will continue to be the right one.

Something tells me this news will help flood your inbox with leads. service, we had individuals, parents, schools, universities, businesses and multinational corporations all using us to secure their networks from threats. OpenDNS’s technological innovations set the foundation to make the last three years here incredible; for instance, we’ve averaged more than 20% growth every quarter for the last ten consecutive quarters.

We’re more than 300 employees, we’re closing $1M annual recurring revenue deals, and we’ve added more than 2,000 paying customers this year alone.

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