Cisco Systems Inc. announced today it plans to acquire privately held Duo Security Inc., an Ann Arbor, Mich.-based maker of a cloud-based access control and multifactor authentication product, for $2.35 billion in cash and assumed equity awards.

Duo’s cloud-based zero-trust security platform verifies the identity of users and the health of their devices before granting access to applications. Cisco said the acquisition will add an important multicloud dimension to its current product line.

The acquisition follows Wednesday’s revelation that hackers bypassed Reddit Inc.’s two-factor authentication, highlighting the need for better authentication services.

Co-founded by two veterans of network security and monitoring firm Arbor Networks Inc., Duo has raised more than $121 million in venture funding and claims to have more than 12,000 customers.

Its software bases access decisions on the trust established in user identities and the trustworthiness of their devices rather than the networks from which access originated. Zero-trust is an increasingly popular approach to security that assumes that nothing inside or outside of the network can be trusted, and so verifies any attempts to connect to systems and applications.

Cisco said the integration of its network, device and cloud security platforms with Duo’s authentication and access products will enable its customers to connect users to any application quickly and securely on any networked device, an increasingly important consideration in multicloud networks. Cisco has sharply stepped up investments in its security portfolio in recent years as the action has shifted to the network and away from individual endpoints. In its most recent fiscal quarter, its security revenues rose 11 percent, to $583 million.

The deal also expands Cisco’s line of subscription-based services. Duo sells its cloud-based service on a monthly subscription basis with per-user pricing. Cisco has been methodically shifting its business toward software delivered as a service in an effort to make his business more predictable and reduce its reliance upon volatile hardware sales. Recurring revenue from software and subscriptions jumped 38 percent in the most recent quarter and now comprises 32 percent of the company’s overall revenues.

Cisco currently provides on-premises network access control via its Identity Services Engine product, which gives information technology departments visibility into and control of users and devices on a network. Duo will be integrated with ISE to provide cloud-delivered application access control.

The acquisition is “a highly strategic addition and enables Cisco to deliver what our customers require in today’s multi-cloud world – the ability to securely connect any user to any application on any network,” David Goeckeler, executive vice president and general manager of Cisco’s networking and security business, wrote in a blog post. Goeckeler said the deal extends Cisco’s visibility beyond the 180 million devices the company currently manages to include an unknown sea of mobile and unmanaged devices.

Duo’s 700 employees will join Cisco’s Security Business Group. Cisco executives declined to disclose Duo’s revenue but told analysts on a conference call that the figures will be incorporated into ongoing guidance. The deal is expected to close by the end of Cisco’s first fiscal quarter ending in October.

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