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Why Cisco Is Acquiring July Systems

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July Systems provides data-driven insights

Cisco Systems (CSCO) is acquiring July Systems, a cloud-based location service provider. July Systems, which offers its services on a subscription basis, has been Cisco partner for years. July Systems offers include data-driven behavioral insights that allow businesses to improve customer and employee experiences.

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Cisco looking to bolster indoor service business

Cisco’s acquisition of July Systems is meant to support its vision to provide intent-based networking, which it described as a fundamentally new approach of building and managing networks for the digital era. Cisco is banking on the July Systems acquisition to bolster its presence in indoor service industries such as healthcare, logistics, manufacturing, and retail.

In fiscal Q3 2018 (ended in April), Cisco’s revenue grew 4.0% year-over-year to $12.5 billion. The company’s $2.7 billion profit in the quarter translated into GAAP EPS of $0.56.

Acquisition-driven growth

Cisco is taking a mix of organic and inorganic approaches to stimulate growth. The company inked three acquisition deals in the first half of 2018, and it acquired eight companies last year, according to Crunchbase.

Deal-wise, Cisco has been more active than network and security peers recently. For example, Palo Alto Networks (PANW) and FireEye (FEYE) have each made only one or two deals so far this year, while Symantec (SYMC) and Juniper Networks (JNPR) haven’t made any. Cisco expects the July Systems deal to close early next year.

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