Cisco Systems, Inc. has acquired software-as-a-service (SaaS) cloud-based security firm OpenDNS, Inc. for $635 million in a cash and assumed equity deal.

Found in 2005, OpenDNS offers cloud security by extending the Domain Name System (DNS) by adding features that protect customers from malware, botnets, phishing, and targeted online attacks.

The company’s SaaS cloud platform is aimed to be quick and easy for customers to deploy and integrate as part of their defense architecture or incident response strategies.

The company services some 65 million people globally, including Fortune 50 companies, small businesses, schools, and hundreds of thousands of homes.

According to reports, the acquisition has been made in consideration of the rise of the Internet of Everything concept, which is predicted to see 50 billion devices become connected by 2020; those billions of devices are a hacker’s wet dream waiting to happen, hence the need to strengthen security surrounding the space.

“As more people, processes, data and things become connected, opportunities for security breaches and malicious threats grow exponentially when away from secure enterprise networks,” Cisco’s Chief Technology and Strategy Officer Hilton Romanski said in a statement. “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.”

Good fit

The combination of OpenDNS’s predictive threat intelligence and SaaS cloud platform with Cisco’s already highly regarded security and threat capabilities is definitely a good fit, and a complimentary one at that.

Given the price of the acquisition, OpenDNS’s enterprise offerings are not going to be given away for free to Cisco customers, but considering Cisco’s presence in the networking marketplace and sales channels, OpenDNS’s service is going to reach more eyeballs, and more customers in the coming years than it would have if it had continued on alone; this is not to say they didn’t already have great exposure (65 million users can be wrong), only that Cisco takes it up another step.

The OpenDNS team will join the Cisco Security Business Group organization led by David Goeckeler, Senior Vice President and General Manager.

Prior to acquisition, OpenDNS had raised $51.3 million in venture capital over 5 rounds. Investors include Lowercase Capital, Chris Sacca, Northgate Capital, Mohr Davidow Ventures, Lumia Capital, Evolution Equity Partners, Greylock Partners, Sequoia Capital, and others.

The acquisition is expected to close in the first quarter of fiscal year 2016, subject to customary closing conditions.

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