Cisco Spends $1.4 Billion on Jasper IoT Platform
really is about the Internet of Things (IoT), just consider its acquisition of Jasper Technologies Inc. Jasper delivers a cloud -based IoT service platform that can connect millions of smart devices -- and Cisco is shelling out $1.4 billion to get its hands on the technology.
Cisco said that Jasper, which describes itself as the "on switch for the Internet of Things," is the leader in the IoT service platform market based on the number of enterprises and service providers that use its technology. Some of the world’s largest companies and service providers rely on the Jasper platform to scale IoT services around the world, according to Cisco.
“IoT has become a business imperative across the globe,” said Jahangir Mohammed, CEO of Jasper, in a statement. “Enterprises in every industry need integrated solutions that give them complete visibility and control over their connected services, while also being simple to implement, manage and scale,”
Cisco’s Place in IoT
Cisco has been pressing toward IoT for years. In 2014, the company partnered with IBM, GE and AT&T to launch the Industrial Internet Consortium, an open membership group that aims to break down technology silo barriers and drive better big data access with improved integration between the digital and physical worlds. In the fourth quarter of 2015, the networking giant threw down the IoT gauntlet with four new digital solutions for industries and a new IoT security portfolio.
By adding Jasper to its IoT mix, Cisco sets the stage for companies to connect devices, such as pacemakers, cars and even jet engines, to cellular networks. Enterprises can also manage IoT connectivity services through Jasper’s software-as-a-service (SaaS) platform, which drives recurring revenue IoT businesses, Cisco said. Jasper has 3,500 enterprises customers and 27 service providers using its technology globally.
We asked Zeus Kerravala, principal analyst at ZK Research, for his thoughts on the mega buy. He told us the Jasper grab was a good move for Cisco, and one that solidifies the company’s place in the IoT market.
“Cisco is an interesting company. They have a very strong association with IoT. They’ve done a lot of evangelizing in the market,” Kerravala said. “But there have been a lot of questions about what Cisco’s role is in IoT because other than being a company that provides Wi-Fi connectivity and some network infrastructure, they hadn’t really contributed to the IoT ecosystem.”
Cisco’s Massive Head Start
Cisco is getting a massive head start with the Jasper acquisition. In the statement, the company noted that IoT is rife with complexities, from securely connecting millions of devices to amassing and parsing the data. Jasper’s IoT services platform will take the pain out of these tasks by automating management and helping enterprises build new business models that drive new ongoing revenue sources, according to Cisco.
“If you believe that IoT is more than just connectivity -- that it involves process, data and analytics -- then what you also need in addition to connectivity, you need a strong IoT platform,” Kerravala said. “Jasper had maybe the best IoT platform in the industry. Jasper had a very big head start over a lot of startups in the space.”
When the Jasper deal closes, Cisco will be in a position to offer an end-to-end IoT solution that works across all devices and all IoT service providers and developers. Cisco will keep building on Jasper’s platform, adding new IoT services to the mix. Cisco specifically mentioned advanced analytics to better manage device usage and enterprise Wi-Fi, and security for connected devices. The acquisition is expected to close in the third quarter of fiscal year 2016.
The Market Will Escalate
“Jasper’s ability to build strong relationships with both enterprises and service providers makes them distinctive in the IoT industry,” said Rob Salvango, vice president of corporate business development at Cisco, in a post on the Cisco blog. “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.”
The Jasper acquisition complements Cisco’s IoT play perfectly, Kerravala. Since the solution is SaaS-based, it contributes to Cisco’s recurring revenue. Jasper already has a big base of customers, selling to both telcos and enterprises so that matches Cisco’s go-to-market model very well, he noted.
“Cisco can take its strong technology product and drop it into their channel," Kerravala said. "Given the fact that I think we are at the very beginning of IoT, Cisco bought Jasper at a very opportunity time because the market will escalate from here.”
Image Credit: Cisco.