Cisco continues to move its eggs into the Internet of Things basket, this time with the $1.4bn acquisition of Jasper Technologies.
In its first acquisition of 2016, Cisco will pay a combination of cash and assumed equity awards, plus additional retention based incentives.
Jasper is a leading machine-to-machine (M2M) wireless communications provider. Strip away the marketing fluff associated with IoT and you are essentially left with M2M, so having spent 12 years in the industry, Jasper could be regarded as one of the forefathers of the Internet of Things as we know it now. These days, the company provides a SaaS platform for IP-enabled ‘things’. As well as the technology, Cisco will gain over 3,500 enterprise customers, including Tesla, Coca-Cola and McDonalds, and underlying partnerships with traditional vendors such as SAP, IBM and Microsoft.
“Jasper understands that enterprises making connected products need a simple, scalable and interoperable IoT service platform that can support the billions of connected devices estimated to be connected to the network in the next five years,” Rob Salvagno, VP of corporate business development at Cisco, wrote in a blog post.
“Jasper recognised early on that in order to support its enterprise customers, it needed to tightly integrate with service provider networks. This strategic decision was game changing – it helped them create an expansive recurring revenue-based business model that offers more breadth and reach than any other IoT player today.”
The acquisition, which is expected to close in the third quarter of the fiscal year, will see Jasper CEO Jahangir Mohammed run the new IoT software division. Mohammed will report to Rowan Trollope, Cisco senior vice president and general manager, IoT and Collaboration Technology Group.
A shrewd move?
Most industries are still fumbling around in the dark with IoT, trying to understand exactly where the value is. As of right now, there are only a handful of industries utilising IoT in any meaningful sense. Smart cities, transport, healthcare, manufacturing and oil & gas are all obvious choices – but for others, it remains a struggle to see exactly how the pieces connect together.
Cisco meanwhile has gone all in on the concept, and is hell-bent on becoming the de facto infrastructure provider in this new interconnected world. The vendor understands that in order for IoT to work, the network will play an integral role and it is making all the right moves to ensure that it becomes the glue that binds the devices together.
In October, Cisco gobbled up ParStream, which provides a database for analysing large amounts of IoT data in real time.
The company has made a series of shrewd moves in order to get out in front of the IoT revolution, with the Jasper acquisition perhaps becoming the jewel in the crown; however, Cisco still faces the most overwhelming challenge to date – convincing its customers, and its partners, that IoT is in fact a revolution, as opposed to a mildly boisterous protest.
A little over a year ago, Cisco launched a range of IoT ‘specialisations’ - training programmes designed to enable partners to design, build and support IoT. The firm has also launched ‘innovation centres’ in major cities around the world, showcasing use cases for the technology. Cisco is doing everything it can to drag its customers and partners onto the same hymn sheet.
The deal underscores the fact that Cisco isn’t exactly hedging its bets on this one. If the San Francisco company has got it wrong – the ramifications don’t bear thinking about. But, if the executives have got it right – Cisco is setting itself up to be the undisputable king-maker in this new world of things.