On Tuesday, Cisco announced its intent to acquire a privately held company out of Alpharetta, Georgia, called Lancope for $US452.5 million.
Lancope was founded in 2000 and makes a product for securing corporate networks.
Even before the deal, Cisco and Lancope were already such partners that Cisco’s massive sales channel sold Lancope’s products and their engineering teams worked closely together.
All the employees joked that they were working toward the day that Cisco would buy them.
“We work so closely with Cisco. They love us. They love our product. Being bought by Cisco seems inevitable,” one insider told us.
But if Cisco was already working so closely with Lancope, why spend so much money to buy it?
Two reasons: CEO Chuck Robbins, like Chambers before him, wants to turn Cisco into more than just a one-trick pony. 60% of the company’s revenues come from sales of its computer network equipment (switches and routers). Robbins wants to turn Cisco’s security products into the company’s next big thing, our source said. Cisco’s existing security unit currently accounts for 4.6% of Cisco’s revenue and was a $US1.7 billion business in 2015.
The other reason was that Cisco plans to take Lancope’s tech and add it to more Cisco products. It’s looking towards the day of protecting billions of devices on the Internet of Things as they connect to a network.
Cisco promised employees it would keep the business running as its own unit, with headquarters remaining in Alpharetta. It even brought in some former employees from Sourcefire to convince Lancope’s workers to stay put because working for Cisco was great. Sourcefire is the security company Cisco bought in 2013 for $US2.7 billion.
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