Cisco will acquire two-factor authentication startup Duo Security for $2.35 billion. The deal boosts Cisco’s cloud security portfolio and also strengthens its intent-based networking strategy, said Rob Salvagno, vice president of corporate development at Cisco.
Duo Security, based in Ann Arbor, Michigan, uses cloud-delivered two-factor authentication to verify the identity of users before giving them access to corporate applications and resources. It also inspects in real-time all devices being used to access these corporate assets.
“Intent-based networking is really about having an overall network policy and the ability to automate that,” Salvagno said. “With Duo, now we have a way to implement a universal identity approach in conjunction with a universal network policy wherever that device or user may be. That will enable our customers to connect any user to any application across any device, so this is really a huge strategic move for us.”
Duo Security Integrations
Duo will join Cisco’s Networking and Security business led by EVP and GM David Goeckeler as a new business unit. Dug Song, CEO of Duo, will continue to lead this new unit as its GM.
Cisco plans to integrate Duo’s authentication and access technology into its network, device, and cloud security platform. For example, integrating Duo’s software-as-a-service (SaaS) model with Cisco’s on-premises network access control product will extend the product’s ability to provide cloud-delivered application access control.
Salvagno said there are several other products across the company’s security and networking business where Duo’s technology will compliment Cisco’s. However, he said he can’t give specific details until after the deal closes, which is expected to happen in the first quarter of Cisco’s fiscal year 2019. “But there are many intersection points across both Cisco’s security portfolio and what we’re doing from a networking standpoint — from core networking to SD-WAN and everything in between,” he said.
Sung co-founded Duo in 2010. The company raised $121.5 million in six funding rounds. It has 12,000 customers and more than 700 employees, Sung wrote in a blog post. Customers include Etsy, Facebook, Random House, Toyota, Paramount, Yelp, and Zillow.
Cisco’s Buying Spree
The acquisition follows several other security startup purchases by Cisco. In July 2017, Cisco announced plans to acquire Observable Networks, which provides cloud-native network forensics security applications. Cisco also bought cloud security startups OpenDNS, Lancope, CloudLock, Portcullis, and Neohapsis in recent years.
“Duo fits in line with that given the high-growth, software-centric, and substantial revenue they bring to the table,” Salvagno said.