Cisco's most recent acquisition 'ticks two important boxes'

American multinational technology conglomerate Cisco has recently made an addition to its security collection by breaking up US start-up Observable Networks. The IT giant has obtained an endpoint guard specialist in Observable, one that uses behavioural modelling to scan users, devices, networks and public/hybrid cloud infrastructure for cyber threats.

Predictable to be finished in Q1 of next year, however, the terms of the transaction, were not revealed but the buy price is likely to be low, said Martin Courtney, principal analyst at TechMarketView.

"Observable has raised around US$6m in funding since being founded in 2011," said Courtney.

"The start-up ticks two important boxes for Cisco — software and cloud — as the networking company continues its mission to shift more of its revenue off hardware and into ‘software-centric' solutions and services."

Courtney said that Cisco foresee burly investment in cyber security defences amid the public and private sector organizations following a wave of high-profile hacking attacks this year, with more certain to come.

"Companies are likely to need comprehensive security solutions which plug every conceivable hole in their IT infrastructure backed up by early warning systems which anticipate and mitigate cyber threats in advance of them being able to do any serious damage," he said.

Courtney said to gather those requirements, Cisco and other large suppliers including the Symantec and Microsoft, have been progressively selling up start-ups to build out their security portfolios.

"Observable's cloud-native platform is delivered under software as a service (SaaS) model and uses machine learning and dynamic behavioural modelling of all devices on the network, both on- and off-premise, to identify internal and external threats more quickly," he said.

Echoing this view, Rob Salvagno, Cisco's head of M&A, said in a blog on the news: "The acquisition of Observable Networks supports Cisco's strategic transition toward software-centric solutions."