Why Cisco’s Focus on IoT Is Opportune



Cisco’s acquisition strategy for growth

So far in the series, we’ve learned that Cisco (CSCO) is targeting the software and IoT space, which is evident from its recent acquisition of AppDynamics. As the below chart shows, in the last five years, Cisco has made 44 acquisitions. In early 2016, Cisco Systems acquired Jasper Technologies. Jasper provides an IoT platform that creates, manages, monetizes, and automates IoT services for Internet-connected devices.

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According to IoT Analytics, Intel (INTC) and Cisco Systems (CSCO) lead in the semiconductor space and the connectivity space, respectively. Cisco isn’t the only player in the technology space aiming to benefit from IoT growth. In October 2016, IBM announced a $200 million investment to develop its Watson IoT headquarters in Munich (EWG) (EFA), focusing on blockchain and security. IBM’s $200 million IoT investment is part of the company’s overall $3 billion investment in IoT.

In mid-2016, Microsoft (MSFT) acquired Solair, an IoT company specializing in connecting workplace devices. Microsoft has also collaborated with Salesforce, using Salesforce’s IoT Cloud along with its own Azure.

IoT is one of the key technologies that will drive the next computing cycle

Cisco, IBM, Microsoft, and Salesforce (CRM) are pursuing a strategy of acquisitions and partnerships to post growth in the IoT space. The reason lies in the IoT’s role in the next computing cycle.

Currently, the IT (information technology) environment is dominated by SMAC (social, mobile, analytics, and cloud) technologies. However, after SMAC, VR (virtual reality), AR (augmented reality), IoT (Internet of Things), AI (artificial intelligence), machine learning, and autonomous vehicles are the key areas that are expected to drive the $13 trillion in spending forecasted for the next computing cycle.


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