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Cisco acquires cloud access security broker CloudLock for $293 million

Cisco made a big move to increase its cloud security business with a $293 million acquisition of CloudLock, a startup in the cloud access security broker space.

Cisco boosted its presence in the cloud access security broker market this week with an agreement to acquire CloudLock...

for $293 million.

CloudLock, based in Waltham, Mass., offers an API-focused CASB platform that provides secure access to cloud applications, as well platform as a service and infrastructure as a service offerings. The CloudLock platform's features include user behavior analytics, data loss prevention and machine learning-based threat protection.

Last week, the cloud security startup, which was founded in 2011, enhanced its machine learning technology with suspicious login activity monitoring, location-based anomaly detection and IP reputation analysis.

Cisco said CloudLock will be part of Cisco's networking and security business group, and it will be a critical part of Cisco's Security Everywhere strategy.

"CloudLock brings a unique, cloud-native, platform and API-based approach to cloud security, which allows them to build powerful security solutions that are easy to deploy and simple to manage," said Rob Salvagno, vice president of Cisco corporate development, in a press statement.

Gil Zimmermann, co-founder and CEO of CloudLock, said joining Cisco was the best option for the company. "When we started talking with Cisco about potential opportunities to collaborate, we quickly realized how much we had in common," Zimmermann wrote in a blog post. "We share the same vision on the future of security that focuses on a platform that scales to any size, provides immediate value, is simple to manage and leverage, and is easily extensible through APIs."

Cisco has made other moves in CASB market over the past 14 months. The networking giant struck a reseller and product integration partnership last April with CASB startup Elastica, which was acquired by Blue Coat Systems later that year. In January, Cisco introduced its Cloud Consumption as a Service platform, which included cloud access security broker features for monitoring usage of and network traffic to third-party cloud apps.

The price Cisco paid for CloudLock is comparable to other CASB acquisitions over the last year. Microsoft purchased CASB startup Adallom last summer for a reported $320 million, while Blue Coat paid $280 million for Elastica in November. Blue Coat also acquired another CASB last year in Perspecsys; while terms of the deal were not disclosed at the time, Blue Coat's S1 filing for a potential initial public offering earlier this month showed the acquisition price was $45.5 million -- Blue Coat itself was recently acquired by Symantec for $4.65 billion.

While the CASB market is hot and poised for growth -- Gartner recently predicted that large enterprise adoption will jump from 5% last year to 85% in 2020 -- market penetration and revenue for many of these startups remain low. For example, Blue Coat's S1 showed that Perspecsys' total revenue between January and June of 2015 was $2 million, while Elastica's revenue between January and November of 2015 was just $395,000.

Next Steps

Read more from RSA Conference 2016 on CASB momentum

Discover how the cloud access security broker space is evolving

Find out what's in the Cloud Security Alliance's latest study

Dig Deeper on Cloud Computing Software as a Service (SaaS) Security

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How will Cisco's acquisition of CloudLock affect CASB valuations?
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Wow, these are some big news. Let's see if Gartner's predictions will become true.
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