US networking giant Cisco is once again bolstering its cybersecurity portfolio with a strategic acquisition, this time it’s the IT security cloud service provider Observable Networks. Cisco made the big announcement this week.
As mentioned earlier by TechCrunch, the deal is significant because it underscores the ongoing interest in security solutions. The deal will help Cisco in securing enterprise IT, adding key technology to its security portfolio. Additionally, it will also help Cisco compete better and fend off rising threats. With Observable Networks under its roof, Cisco gets another layer of protection and enhancement to its core networking offerings, which include providing switching and routers to enterprise data center.
How important the deal to Cisco
According to TechCrunch, which got the full details of the story, the San Jose, the California-based networking giant has just acquired Observable Networks, a provider of real-time network monitoring tool that helps IT teams detect web anomalies and external threats that might affect or threaten enterprise security.
The tech giant plans to use Observable’s technology to build out Stealthwatch platform in the highly lucrative cloud computing market. Cisco’s new big push in the news security space have been seen by some analysts as a direct attempt to offset its declining legacy networking business. Some analyst believes that the IT security services could be Cisco’s new market for growth.
The company is currently waging war against a bunch of fast-growing and aggressively networking companies, which include Juniper Networks and Huawei.
Founded by Patrick Crowley, Observable Networks has been around since 2011. Before the Cisco’s deal, the startup has raised less than $5 million from 3 notable investors, DH Capital, MK Capital, and Vectis Healthcare & Life Sciences Fund II.
The St. Louis-based startup was estimated to be valued at around $16 million, according to the latest data from startup profiler CrunchBase.
As a part of the Cisco’s deal, all the startup’s employees will be joining Cisco’s head office in San Jose, California. Observable Networks’ CEO Bryan Doerr made the announcement in his recent blog post.
The deal is expected to close in Cisco’s first fiscal quarter of 2018. Both companies haven’t disclosed the financial terms of the deal.
Other Cisco’s security-related acquisitions
This is not the first time Cisco has acquired a security company. The tech giant has already made a number of security-related acquisitions in the past few years. These include the Massachusetts-based CASB (cloud access security broker technology) specialist CloudLock for $293 million and the Georgia-based cybersecurity firm Lancope for $453 million. Last June, it announced an initiative about new cloud-based security services, which reportedly include a service to detect cyberthreats even in encrypted web traffic.
