Cisco announced today it was buying Jasper Technologies, a company that sells an Internet of Things cloud platform, for $1.4 billion.
With Jasper, Cisco gets a company that understands the burgeoning Internet of Things market. While the IoT is term bandied about quite a bit, it simply means connected machines talking to one another over the internet. This could be industrial automation equipment on a shop floor, a connected car, a connected wind turbine or even a smart thermostat.
What these systems do is generate tons of data and that requires a platform to process, manage and understand all of that data being fed by these devices. The cloud is a particularly smart play for this level of (big) data because companies can scale as much as they need as the amount of data grows.
Cisco clearly recognizes this and is trying to take advantage of it. As VP of corporate business development Rob Salvagno wrote in a blog post announcing the purchase:
Jasper’s ability to build strong relationships with both enterprises and service providers makes them distinctive in the IoT industry. Jasper recognized 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.
As Cisco tries to fight off disruptive forces, one of the industries it’s been concentrating is Internet of Things, especially with a cloud bent. Jasper gives the company an industrially focused company with a broad international customer catalogue including Ford, GM, Heineken and Boston Scientific to name but a few.
Cisco is making a big move into software and it makes sense in the context of the company’s core networking strength, explained R Ray Wang, founder at Constellation Research.
“The battle in IOT is ultimately about the network. Sensors, stacks and platforms will be commoditized in the network. But you need them for the foundation in the network. It’s a very smart and calculated move by Cisco,” Wang told TechCrunch.
It appears to be quite an exit for the Santa Clara-based technology company, which to this point had raised over $200 million, according to Crunchbase. The most recent round was $50 million in September 2014.
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