Expanding into the emerging Internet of Things market shouldn’t be too hard for Cisco considering how it’s the largest manufacturer of networking equipment in the world, but that doesn’t mean it needs to go through the trouble of building a new business from scratch. Instead, the company has decided to acquire a California-based startup by the name of Jasper Technologies for $1.4 billion, which will serve as the platform on which Cisco builds its future Internet of Things business.
Networking giant Cisco Systems has agreed to pay $1.4 billion for Jasper, a Santa Clara, Calif-based company that focuses on technology for connecting smart devices to the Internet — the so-called Internet of Things. Jasper had raised about $205 million in venture capital investments from Sequoia Capital and Benchmark and more recently from the private equity fund Temasek. Having reached a valuation north of $1 billion, it was considered a candidate for an IPO. The company makes cloud-based control software that helps companies connect machinery and equipment ranging from vending machines to farming equipment on the Internet. Among its 3,500 customers are the GPS company Garmin, greeting card giant Hallmark and the jet engine manufacturing division of GE. In a statement, Cisco said it intends to build upon Jasper’s efforts by adding industrial-grade Wi-Fi and improving its ability to analyze data gathered from devices. Steve Hilton, an analyst with MachNation, a firm that tracks the IoT industry, said the move will make it easier for companies contemplating IoT deployments to work with a single player. “Enterprises will no longer have to use multiple vendors to manage their environments,” he said.