Cisco to acquire API-based app security startup CloudLock for $293M
Twilio isn't the only company that is banking on API-based services as the way forward for enterprises. Today, Cisco announced it plans to pay $293 million in a mix of cash and equity to acquire CloudLock …
Context & Ripple Effects
CloudLock is the second software acquisition Cisco has announced this year, following the $260M purchase of cloud management provider CliQr a few months earlier (Cisco's CliQr deal). Both fit the same playbook: buying API-based cloud services rather than building them, as the networking giant works to offset slowing hardware revenue.
The deal also previews what became a sustained pattern — Cisco went on to absorb AppDynamics for $3.7B just after its IPO filing (the AppDynamics acquisition) and Duo Security for $2.35B (the Duo Security buy), each time paying up for a specialist that had already proven product-market fit.
First-order effects
- CloudLock's API-based app security technology is folded into Cisco's portfolio, giving Cisco an immediate entry into cloud access security without developing it in-house.
Second-order effects
- Standalone cloud-security vendors now face a competitor that can bundle app security with Cisco's existing network and enterprise relationships, pressuring pricing across the category.
Third-order effects
- If the CliQr–CloudLock–AppDynamics–Duo sequence holds, enterprise security consolidates around large platform buyers absorbing specialists, shrinking the window in which independent security startups can stay independent or exit at premium valuations.
The trend: Cisco is executing a decade-long pivot from hardware vendor to software-and-security platform through serial acquisition of API-based specialists.