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Cisco pays a cool $2.3B for hot security specialists Duo

Cisco pays a cool $2.3B for hot security specialists Duo

Vendor helps protect organisations against cyber breaches through cloud-based software

Chuck Robbins - CEO, Cisco

Chuck Robbins - CEO, Cisco

Credit: Cisco

Cisco has laid out US$2.35 billion in cash and stock for network identity, authentication security company Duo.

Headquartered in the US, Duo - not to be confused with specialist Wellington-based distributor Duo - helps protect organisations against cyber breaches through cloud-based software.

Such software verifies the identity of users and the health of their devices before granting access to applications with the idea of preventing breaches and account takeover.

"At first glance, the initial observation for why Cisco is acquiring a unified security access and multi-factor authentication business likely would be to complement our cloud security portfolio,” wrote David Goeckeler, executive vice president and general manager of networking and security at Cisco.

"While this assumption is correct, Duo’s relevance within the context of our intent-based networking strategy spans across the entire extended enterprise.

"It is a highly strategic addition and enables Cisco to deliver what our customers require in today’s multi-cloud world – the ability to securely connect any user to any application on any network."

Cisco currently provides on-premises network access control via its Identity Services Engine (ISE) product, with Duo's software-as-a-service-based (SaaS) model set to be integrated with Cisco ISE to extend ISE to provide cloud-delivered application access control.

By verifying user and device trust, Duo will also add trusted identity awareness into Cisco's Secure Internet Gateway, Cloud Access Security Broker, Enterprise Mobility Management, and several other cloud-delivered products.

Furthermore, Cisco's in-depth visibility of over 180 million managed devices will be augmented by Duo's broad visibility of mobile and unmanaged devices.

"The Duo acquisition moves Cisco in a new direction — identity and access. It’s a seminal development for IT teams deploying multi-cloud models — the integration of networking, security and identity all delivered from a cloud-based, frictionless platform," Goeckeler stated.

Cisco said that Integration of its network, device and cloud security platforms with Duo Security’s zero-trust authentication and access products will let customers to quickly secure users to any application on any networked device.

In fact, about 75 per cent of Duo’s customers are up and running in less than a week, compared to six to 12 months for comparable products.

This focus on customer success has led to over 12,000 customers, including over 100 of the Fortune 500 companies, wrote Rob Salvagno, vice president of corporate business development at Cisco, in a blog about the buy.

"Duo’s opportunity with Cisco extends well beyond security to Cisco’s entire intent-based networking strategy," Salvagno added.

"Cisco’s ability to drive Duo’s relevance across the entire extended enterprise, both through our integrated security and network architecture, as well as through our go-to-market channels, gives me confidence that we have the opportunity to deliver significant value with this acquisition."

The deal is Cisco’s biggest since its US$3.7-billion buy of performance monitoring software company AppDynamics in 2017, and its largest in the cyber security sector since its US$2.7-billion Sourcefire buy in 2013.

Duo, founded in 2009, has about 700 employees working from offices in Michigan; Detroitt; Texas; California and London.

Cisco said it expects the deal to close in the first quarter of the vendor's fiscal year 2019.

According to a report from MarketWatch Duo said in early 2017 that it had recorded US$73 million in annual recurring revenue in 2016, growing that total 135 per cent from the year before.

In a similar announcement in early 2018, Duo said it had surpassed US$100 million in recurring revenue - Duo Security was valued at about US$1.17 billion as of its last funding round.

Cisco Security topped US$2 billion in annual revenue for the first time in the 2017 fiscal year, reporting US$2.15 billion in sales out of Cisco’s total of US$48 billion.

(Reporting by Michael Cooney, Network World)


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