Cisco announced recently that it was buying Jasper Technologies for \$1.4 billion. Jasper's IoT platform enables thousands of companies to launch, manage and monetize IoT services on a global scale. They specialize in managing the wireless connections and billing relationships with the cellular carriers needed for IoT applications.
Jasper has a broad geographic reach of more than 3,500 customers in more than 100 countries. They currently partner with 27 mobile operator groups, representing more than 100 mobile operator networks worldwide. Their technology is present in a diverse range of applications. It enables drivers to remotely unlock doors, start the engine or call emergency roadside assistance in cars from Ford and Nissan. Amazon Kindle readers can get e-books delivered over the Internet through its software. Heineken NV uses it to monitor beer quality and keg levels. General Electric Co. jet engines connected via Jasper technology deliver performance data to maintenance engineers on the ground, reducing costs.
I spoke to Macario Namie, Jasper's VP of strategy, about the acquisition and was interested in how he thought it would benefit Jasper
"They have assets, funding, product portfolio and frankly, they believe in us and want to support the vision of what we want to achieve," said Namie. "We want to be the winner in IoT and this will help really make this happen in what is arguably the next generation of the Internet. "
He emphasized that they would continue to operate as a standalone team as part of Cisco’s new IoT business unit. "They are buying the Jasper team, all of us are coming over to form a dedicated business unit, and will take our current business and continue to perform well at it and accelerate our vision of what it takes to build connected services and businesses"
I was curious about if there were any concerns as Cisco has an interesting history in acquiring innovative businesses. Cisco has bought over 140 companies including forty-one during 1999-2000. Some acquisitions have been highly successful while others have failed.
Cisco acquired Monterey Networks for half a billion dollars in 1999. Within days of the deal, all three of Monterey’s founders left the company and eighteen months later Cisco shut down the business altogether, taking \$108 million in write-offs.
Linksys was acquired in 2003 for a deal valued half a billion dollars. It was to be operated as an autonomous division of Cisco, its products sold under the Linksys brand through its existing retail, distributor and e-commerce channels and was a move into the home networking consumer market. 10 years later it was sold to Belkin.
Cisco bought Pure Digital Technologies, maker of the Flip video cameras in 2008 for \$590 million. While it could be considered an effort to complement its consumer electronics portfolio, it seemed a bit incongruous compared to its core enterprise networking focus. Two years later, it closed Flip's business unit and cut 550 employees.
"There's always a nagging concern, can the magic still remain," admit Namie, "A lot of times it doesn’t work but what gives me a lot of hope here of a successful acquisition is our standalone team The general manager will be the current Jasper founder. We will have our own engineering team, marketing, and sales. The magic that's created today will remain. So much of the world's internet traffic runs on Cisco. We layer onto what they’ve already done with a software model and a recurring revenue model."
The acquisition on paper reads as a mutual win for both Jasper and Cisco. Cisco will continue to build upon the Jasper IoT service platform and add new IoT services such as enterprise Wi-Fi, security for connected devices, and advanced analytics to better manage device usage. Jasper will have increased scope from the funding and a shared vision. Both companies are currently in transition, waiting for regulatory approval and are looking to join forces in by early April. Whether the companies can create a lasting, beneficial symbiotic relationship will be interesting to see.