Cisco plans to acquire three companies with products that stretch across major trends in the networking industry:...
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data analytics, security and cloud.
Announced this week, the Cisco acquisitions demonstrate the company's intent to buy the technology it needs to remain competitive. The companies that are expected to become a part of Cisco by the end of January include Internet of Things (IoT) analytics company ParStream, network security vendor Lancope Inc. and cloud-based video platform provider 1 Mainstream Inc.
Privately held ParStream fits into Cisco's plans for building a high-growth IoT business. ParStream, based in Cologne, Germany, has developed software that filters raw data from Internet-connected devices and selectively stores information in a database that can be deployed at the edge of the network. The company also provides the analytics for extracting actionable intelligence that is sent to a company's data center.
ParStream would bolster Cisco's strategy of providing analytics at the edge of the network. Cisco argues that sending all raw data from Internet-connected sensors and devices to a central data center server would be less efficient and cost more in network infrastructure.
"The important thing for Cisco is to increase their relevancy with IoT at the edge," said Vernon Turner, analyst for IDC, based in Framingham, Mass. ParStream has low-power, data compression technology that makes processing information in an IoT gateway efficient.
"This is a very, very nice piece for [Cisco's] portfolio," Turner said. In addition, ParStream's partners include technology company PTC Inc., a major supplier to the manufacturing industry
In building out its IoT product line, Cisco is hoping to grab a chunk of the global IoT market that IDC says will grow from $655.8 billion last year to $1.7 trillion in 2020. During the same timeframe, the number of Internet-connected devices, ranging from household appliances and stereos to manufacturing robots and oil and gas pipelines, will rise from 10.3 billion to 29.5 billion.
Prior to the Cisco acquisitions, ParStream was part of Cisco's Entrepreneurs in Residence startup program. Cisco plans to place the company in its Data and Analytics Group.
Lancope security to complement ASA line
Lancope, based in Alpharetta, Ga., is also an analytics company, but its focus is security. Cisco agreed to pay $452.5 million in cash for Lancope, which specializes in network behavior analytics.
Lancope's technology identifies traffic patterns that could indicate a cyberattack. The company's products are expected to complement Cisco's Adaptive Security Appliances (ASA). The firewall technology competes with Palo Alto Networks and FireEye Inc.
Cisco has long argued that the best way to secure a data center is through monitoring and filtering network traffic. CEO Chuck Robbins, who replaced longtime CEO John Chambers in July, has said he plans to bolster Cisco's security portfolio through acquisition and internal development.
Lancope is the latest of several security-related acquisitions over the last two years. Others include Sourcefire, which Cisco bought for $2.7 billion in 2013, and security-as-a-service company OpenDNS, which Cisco acquired this year for $635 million.
1 Mainstream video service reflects IoT entertainment focus
Finally, the 1 Mainstream Inc. acquisition shows Cisco's interest in online video services. The privately held company, based in Cupertino, Calif., provides a cloud-based platform for streaming over-the-top (OTT) video to Internet-connected devices that range from the Apple TV and Microsoft Xbox to tablets and smartphones.
1 Mainstream lets service providers, broadcasters and media companies distribute content across the wide variety of devices. The acquisition complements Cisco's Infinite suite of video entertainment technology that is focused on OTT TV services. Cisco launched the suite in September.
Cisco plans to fold 1 Mainstream into its Service Provider Video Software and Solutions Cloud Engineering Group.
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