Cisco to buy Duo Security for $2.35bn

Cisco to integrate Duo's authentication, access management and remote monitoring cloud services with its own technology

Cisco Systems is to buy cloud identity management and security company Duo Security in a deal valued at $2.35 billion, Cisco's biggest acquisition since it bought AppDynamics for $3.7 billion in 2017.

The deal was announced today.

Duo's service is intended to verify the identity of users and remotely monitor the health of their devices before granting them access to applications. Cisco plans to integrate the company's technology with its own network, device, and cloud security platforms.

Cisco claims to have a three-point plan with regard to the acquisition and integration of Duo and its technology:

• Integrate Duo's software-as-a-service-based (SaaS) model with Cisco's own Identity Services Engine (ISE), which it uses for network access control in its own on-premise systems;
• Simplify organisations' policies for cloud security. Cisco claims that Duo's technology will add trusted identity awareness into Cisco's Secure Internet Gateway, Cloud Access Security Broker, Enterprise Mobility Management, and several other cloud-delivered products; and,
• Extend endpoint visibility coverage by integrating Duo's coverage of the mobile and unmanaged devices it watches over with Cisco's visibility of more than 180 million managed devices.

Duo CEO Dug Song was understandably delighted. In an open letter, Song described Cisco as "not only the world's largest networking company, but also the world's leading enterprise security business".

Song continued: "Cisco views our leadership in zero-trust security as transformational to their business, bringing cloud-based user and device trustworthiness to an already impressive security product portfolio."

Song hinted that, while there would be a high level of integration between Duo's technology and Cisco's, Duo would be retained as a distinctive business unit within Cisco. Song will continue running the company as general manager of Duo, rather than CEO.

The deal is expected to be completed during the first quarter of Cisco's fiscal 2019 - the three months to the end of October 2018.

Duo has enjoyed a series of funding rounds, including an investment from Dave Duffield's Workday in a $70 million Series D round completed in October 2017, which valued it at $1.17 billion. Other investors include Meritech Capital and Lead Edge Capital.

The company has around 700 employees based in the US and London.