On Wednesday, Cisco Systems Inc announced that it was buying Jasper Technologies Inc, an IoT (Internet of Things) startup that that makes it easier for enterprises to connect their products through the cloud for $1.4 billion in cash and equity awards, its largest acquisition since 2013.
During the announcement, executives for both companies said the combination of their product portfolios will create a much more complete IoT offering. Cisco offers much of the back-end data center systems that enterprises and service providers use to build their public and private cloud environments, and software and services on the other end, from analytics to collaboration.
Jasper offers the platform that customers can use to connect their products through the cloud and then managing those connections, making it easier for enterprises to embrace the Internet of things. The platform connects any product via mobile networks run by service providers, and then offers a software-as-a-service (SaaS) to manage those connections.
After the sale is completed later this year, Jasper CEO Jahangir Mohammed will run Cisco’s new IoT Software Business Unit, reporting to Rowan Trollope, senior vice president and general manager of Cisco’s IoT and Collaboration Technology Group.
Cisco officials said the company will build upon Jasper’s IoT service platform by adding new services, such s enterprise WiFi, security for connected devices and advanced analytics.
The IoT is expected to grow rapidly over the next several years as more systems, sensors and devices become connected to the Internet and each other.
Cisco officials are predicting that by 2020, there will be 25 billion connected devices worldwide, from cars and home appliances to industrial systems, medical appliances and baby monitors. Forecasts from other industry observers vary, but all agree that the growth rate will be steep. Cisco officials also say the economic impact worldwide could hit $19 trillion worldwide by 2020.
IDC analysts are predicting that spending on the IoT will jump from $698.6 billion last year to almost $1.3 trillion in 2019.
Cisco has been aggressively building out is IoT capabilities for the past few years through acquisitions, partnership and in-house development. In July 2015, the company rolled out its IoT System, a collection of new and existing products that touch everything from networking and security to management and analytics.
The products offer users a complete set of tools to manage not only complex and diverse set of systems, endpoints and platforms needed for the IoT, but also the massive of data they will generate, officials said.
In November 2015, Cisco announced a partnership with telecommunications giant Ericsson that will help both push deeper into a range of emerging market segments, including the IoT, software-defined networking (SDN) and network-functions virtualization (NFV).
In March 2015, another big legacy company, IBM, said it would invest $3 billion over the next four years to help companies track the data from sensor-equipped devices and smartphones. IBM calls its initiative the IoT Foundation. Other competitors in the space include General Electric and Microsoft.