CSCO Cisco Systems Inc

By Don Clark and Brittney Laryea 

Cisco Systems Inc. on Tuesday said it is buying CloudLock Inc., a startup that helps companies monitor and control how employees are using cloud services.

The $293 million deal for the closely held company includes a combination of cash and assumed equity awards, Cisco said. The company agreed to pay additional retention incentives to CloudLock employees who join Cisco.

Cisco, the biggest maker of networking hardware, has used acquisitions to help build a major sideline in security software and services. It agreed to pay $2.7 billion in 2013 for Sourcefire Inc., a maker of security hardware and software, and $635 million in 2015 for OpenDNS, which uses internet domain name servers to help block cyberattacks.

CloudLock, based in Waltham, Mass., developed its technology to address the widening use of cloud-based apps from companies such as Salesforce.com Inc. and Dropbox Inc., which can hold sensitive company files. Its online software helps track how employees are using such services and enforce security policies, such as limiting how they access and transfer files, Cisco said.

The acquired company, which has about 130 employees, will become part of a security group led by David Goeckeler, a Cisco senior vice president who also is responsible for networking products. He said that Cisco hopes to market each security product individually while gradually creating an "architecture" for a suite of offerings that work together well.

"The issue in security is, it's not good enough to have a bunch of best-of-breed products," Mr. Goeckeler said in an interview.

The companies expect the deal to close by November.

Cisco Systems shares rose 1% Tuesday afternoon amid a broader market rally.

Write to Brittney Laryea at Brittney.Laryea@wsj.com

(END) Dow Jones Newswires

June 28, 2016 14:27 ET (18:27 GMT)

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