Cisco is buying red-hot IoT (Internet of things) startup Jasper for $1.4 billion, in a move that embodies the type of unions that will help define the IoT market moving forward. Here are the key details from Cisco's announcement:
Jasper is the industry’s leading IoT service platform in terms of number of enterprises and service providers; in fact, many of the world’s largest enterprises and service providers are using the Jasper platform to scale their IoT services business globally. With Jasper, companies can connect any device – from cars to jet engines to implanted pacemakers – over the cellular networks of the top global service providers, and then manage connectivity of IoT services through Jasper’s Software as a Service (SaaS) platform.
IoT brings with it many complexities, such as connecting and securing millions of devices and collecting and analyzing data. Jasper simplifies these challenges and helps customers accelerate the shift to IoT. The Jasper IoT service platform automates the management of IoT services across connected devices and enables companies to create new business models that transform their products into connected services and generate new sources of ongoing revenue.
Analysis: Ample and Obvious Synergies for IoT
Jasper's platform is cloud-based and uses a subscription model. That, plus the fact it has more than 3,500 enterprise customers, made it an attractive acquisition target for Cisco. The synergies are obvious, with Cisco able to couple its networking hardware with Jasper's mature IoT software platform. While still considered a startup, Jasper was actually founded in 2004.
"Cisco just moved up a layer from controlling the network as an endpoint to controlling IoT sensors and devices as an endpoint," says Constellation Research VP and principal analyst Andy Mulholland. "Jasper comes from the industrial automation direction and Cisco comes from the IT direction, so it's an interesting new combination."
"The battle in IoT is ultimately about the network," says Constellation Research founder R "Ray" Wang. "Sensors, stacks and platforms will be commoditized, but you need them for the foundation in the network. It's a very smart and calculated move by Cisco."
Cisco is planning to form a new IoT software business unit, which will be led by Jasper CEO Jahangir Mohammed. The deal is expected to close later this year.
The Jasper deal does raise questions about the sweeping partnership Cisco and Ericsson formed in November. The deal is intended to leverage "the combined scale and innovation of both companies to accelerate the platforms and services needed to digitize countries and create the Internet of Things," the companies said at the time.
As IDG News Service notes, however, Jasper's platform will compete directly with Ericsson's Device Connection Platform. That being said, with predictions the IoT market will soon be measured in the trillions, not billions of dollars, there should be plenty of room for co-opetition.
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