Cisco to Buy Network-Security Firm Lancope for $453 Million
Acquisition is the latest move by networking giant to boost its security business — Cisco Systems Inc. agreed to buy privately held network security company Lancope Inc. for about $453 million, the latest move by the networking giant to boost its security business.
Context & Ripple Effects
The Lancope deal lands just months after Cisco's $635 million OpenDNS acquisition earlier in 2015, making this the second security buy in under half a year and confirming that Cisco intends to assemble a security stack rather than license one. Both purchases follow the same logic: attach detection and policy software to the network equipment Cisco already sells into every enterprise.
First-order effects
- Lancope's network-behavior monitoring becomes part of Cisco's own portfolio, giving enterprise buyers of Cisco switching and routing gear an integrated analytics option instead of a third-party overlay.
Second-order effects
- Standalone security-analytics vendors now compete against a buyer who can bundle detection with the underlying network hardware at near-zero marginal cost, pressuring them on price or pushing them toward consolidation themselves.
Third-order effects
- If the pattern holds, security capability migrates inside infrastructure platforms: Cisco's bolt-ons here scale over the next decade into the $28 billion Splunk acquisition and reported talks for Axonius at roughly $2 billion, meaning independent network-security firms face a market where their most likely acquirer is the equipment vendor they once complemented.
The trend: Cisco is executing a decade-long acquisition-led buildout of its security business, scaling from sub-$700 million tuck-ins like OpenDNS and Lancope toward multibillion-dollar platform buys.