Moor To The Story: Quicktake on Cisco’s Acquisition of OpenDNS

This week, Cisco Systems announced its acquisition of OpenDNS for $635M. OpenDNS is a Software as a Service (SaaS) provider for deploying security solutions that enables companies to quickly deploy applications and end-point security solutions to protect themselves and their devices from malware and viruses. This acquisition will help Cisco Systems significantly grow its security profile, especially around the cloud and Internet of Things (IoT).

This move is another layer in Cisco System’s portfolio that sits on-top of complimentary acquisitions including Sourcefire and ThreatGrid. The combination of the two companies creates a massive threat intelligence network capable of coalescing real-time data from end-point devices, over any port, protocol, or application. Because of Cisco’s massive footprint, OpenDNS will help Cisco and its customers to better understand the relationships between networks and attached devices in real-time. Moreover, by using OpenDNS’ predictive intelligence (using machine learning) companies and users can track, block, and eliminate malware before it enters their environment. This acquisition will enhance Cisco’s ability to proactively identify security activity patterns and determine where attacks originate at the domain level.

Further, OpenDNS has partnerships with firms like; Aruba Networks Inc., Check Point, D-Link, Netgear Inc., FireEye Inc. ThreatQuotient, etc. that will help Cisco to expand and reinforce their capabilities, intelligence, and visibility across global networks. OpenDNS brings a unique ability to manage security at the domain level, enabling companies to identify spikes in DNS queries and to gain timely and historical trend data to track average traffic to determine patterns and anomalies within the network.

This move is in line with trends we have seen emphasizing data and application protection and less about protecting the overall network. However, to achieve this, network operators need to have to have better visibility and ability to proactively identify security threats, especially as more devices and resources become connected. Further complicating this, IoT inherently poses a security and governance risk – devices manufacturers do not understand network security, and most network service providers do not understand end-point device security. OpenDNS will help Cisco bridge several gaps in IoT security.

With many cloud service providers acting as bystanders when it comes to security, the acquisition of OpenDNS should spark a race for acquisitions with firms jockeying for position in the security market. Look out for firms like: Kapersky Lab, SafeDNS, Symantec, Webroot inc., etc. to make significant moves from either a partnering or an acquisition perspective.

Cisco Systems has positioned itself as a dominate force in networking and cloud security. The acquisition of OpenDNS, we believe, will have long-term benefits and will be a major factor in Cisco’s overall security strategy. By understanding threats at the device level Cisco can identify and reduce the attack surface and available weak spots that are prime targets for criminals. This alone will reduce the kinds of attacks that happened at Target, Home Depot, Sony, etc.

One of the areas to watch with this acquisition is how Cisco integrates OpenDNS into its Route-to-Market strategy. In the past, Cisco has stumbled a bit when integrating and deploying SaaS based technologies to its channel partners. However, with security being top-of-mind we believe Cisco will do what it takes to make OpenDNS a success.