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Cisco acquires OpenDNS to fight IoT threats

Cisco plans to acquire OpenDNS and use its security-as-a-service products to reduce the number of IoT threats customers face.

Cisco plans to acquire security as a service company OpenDNS to help customers reduce the risks they face in connecting corporate networks to devices found on the Internet of Things.

Cisco said this week it expects to spend $635 million for San Francisco-based OpenDNS. The transaction is set to close by the end of October.

Cisco plans to integrate OpenDNS services into its cloud-based security products to make them more useful in providing protection to companies leveraging the Internet of Things (IoT). The IoT refers to scenarios in which data is collected and analyzed from any Internet-connected device, ranging from home appliances and televisions to manufacturing equipment and subway cars.

Cisco estimates 50 billion devices will be on the IoT by 2020. The company is developing a broad portfolio for the IoT, including networking gear, analytics and security.

OpenDNS in Cisco cloud-based security

Within Cisco's cloud-based security products, OpenDNS will act as the "first line of defense to Internet traffic," IDC analyst Christina Richmond said. Cisco customers will also get greater insight into the IoT threat landscape, while OpenDNS customers will benefit from higher spending on research and development.

"It is a good acquisition for Cisco in my opinion," said Richmond.

OpenDNS will also be a "useful complement" to ThreatGrid, Cisco's malware sandboxing product, said IDC analyst Pete Lindstrom. ThreatGRID provides a simulated environment to run and analyze suspected malware.

OpenDNS started in 2006 as a domain name system (DNS) provider that competed against similar services sold by Internet service providers. OpenDNS later used its visibility into Internet traffic to launch services that blocked malware, phishing attacks and botnets before they reached corporate networks.

OpenDNS' flagship product is called Umbrella, a cloud-delivered security service that blocks threats from any port, protocol or app. The company also sells threat intelligence that helps companies evaluate the risk posed by attack activity on the Internet.

At Cisco Live in June, the company's incoming Chief Executive Chuck Robbins listed security as an area ripe for "small, strategic acquisitions." Cisco acquired ThreatGRID last year and SourceFire in 2013. SourceFire, which cost $2.7 billion, provides intrusion prevention technology.

Robbins is scheduled to succeed CEO John Chambers July 26. Chambers is stepping down after nearly 20 years at the helm. He will remain with the company as executive chairman.

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