Cisco refines IoT strategy with $1.4 billion acquisition
Thu 4 Feb 2016
Cisco has announced that it intends to purchase Jasper Technologies, Inc. for $1.4 billion. This acquisition will gain the San Francisco-based multinational the specialized platform Jasper has developed for cloud-based IoT management, as well as an extensive customer base to increase Cisco’s plans for the Internet of Things.
Jasper provides cloud-based platforms that help companies manage Internet of Things services, connecting a wide variety of devices through cellular networks and then managing connectivity and collecting data through their Software as a Service (SaaS) platform. Customers can access their IoT data through a specialized Control Center, in categories as diverse as transportation and logistics, retail, industrial equipment, and security and home automation. According to their press release, “Cisco will continue to build upon the Jasper IoT service platform and add new IoT services such as enterprise Wi-Fi, security for connected devices, and advanced analytics to better manage device usage.”
Cisco will also retain Jasper CEO Jahangir Mohammed to run the new IoT software business unit at Cisco.
This acquisition dovetails nicely with Cisco’s purchase of OpenDNS last year. Cloud-based interconnectivity of devices brings with it major security concerns. The $635 million acquisition of OpenDNS, completed last August, added a layer of cloud security to Cisco’s existing security measures. In a blog post last June announcing the acquisition, Hilton Romanski, head of Business Development for Cisco, stated,
“To build on Cisco’s advanced threat protection capabilities, we plan to continue to innovate a cloud delivered Security platform integrating OpenDNS’ key capabilities to accelerate that work.”
In a white paper released [PDF] last June, Cisco estimated that the Internet of Everything represents a $19 trillion opportunity over the next decade. The document included estimates of a potential $14.4 trillion in private sector and $4.6 trillion in public sector value through IoT management, with key areas of improved efficiency, increased productivity, improved customer experiences and technological innovations. The combined $2+ billion spent on the combined acquisitions of Jasper and OpenDNS represents Cisco’s serious attempt to improve its foothold in this potential market.
While a 2014 overhaul of hardware systems helped forestall declining hardware sales for Cisco, Gartner’s Worldwide IT Spending Forecast predicted declines in hardware spending in 2016. Diversification into more software-solutions based enterprises is a safe bet for Cisco, in the face of slow growth in their core business.