Cisco’s $635 Million Buys OpenDNS for Cloud Security, IoE Protection

Cisco (CSCO) will pay some $635 million in cash to acquire OpenDNS, a provider of cloud-based threat protection services, in a move the networking giant said will boost its cloud security profile and gain it predictive services to help customers blunt cyber attacks.

Under terms of the deal, Cisco will fold the San Francisco-based OpenDNS crew into its Security Business Group organization headed by David Goeckeler, Cisco senior vice president and general manager. Cisco said it will assume OpenDNS existing equity awards and include retention-based incentives in the transaction. Officials expect the acquisition to close in the first quarter of fiscal year 2016 based on regulatory approval.

At this point, there’s no word if all 10 of OpenDNS’ leadership team will remain on as part of the Cisco team. However, David Ulevitch, OpenDNS founder and chief executive, wrote in an employee note posted on the company’s website that he will stay on.

“Very few companies ever achieve a level of success like we have,” he wrote. “In case any of you are wondering, I’m not going anywhere,” Ulevitch said. “Cisco is not buying OpenDNS for our individual components, but for the whole.”

Cisco positioned the OpenDNS buyout as an important cog in its security machinery, packaged in a cloud-based, software-as-a-service deliverable particularly applicable to security issues associated with the Internet of Everything (IoE) and the expected flood of 50 billion connected devices in the next few years.

Because the OpenDNS cloud platform provides security in a SaaS model, customers can deploy and integrate it quickly into their existing defense architecture or as part of an incident response strategy, Cisco said. Considering the limited visibility of enterprise IT teams into potential threats from an unchecked number of unsecured entry points into the network, the advantages of an add-on SaaS-delivered security readily deployed in the enterprise without corralling in-house teams is clear, the vendor said.

Hilton Romanski, Cisco chief technology and strategy officer, said the acquisition enables Cisco to offer security threat awareness and visibility services to its customers for 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,” he said. “OpenDNS has a strong team with deep security expertise and key technology that complements Cisco’s security vision. Together, we will help customers protect their extended network wherever the user is and regardless of the device.”