Partners Applaud Cisco's $1.4 Billion Purchase of IoT Superstar Jasper; Expect IoT Sales To Ramp Up

Partners are hailing Cisco's $1.4 billion purchase of cloud-based Internet of Things provider Jasper Technologies as a way to drive new IoT sales and recurring revenue.

"No question, it will help drive IoT sales," said Brian Ortbals, vice president of Advanced Technology at World Wide Technology, a St. Louis-based solution provider and Cisco Gold partner, ranked No. 11 on CRN's Solution Provider 500 list. "We heard time and time again Cisco's desire to move to an IoT platform strategy, and certainly you look at what Jasper provides and some of their reference solutions -- they're a key piece in an overall platform strategy. It makes perfect sense."

Privately held Jasper Technologies, named in CRN's 10 Coolest IoT Startups Of 2015, delivers a cloud-based IoT service platform aimed at helping enterprises and service providers launch, manage and monetize IoT services on a global scale. Cisco touts Jasper, based in Santa Clara, Calif., as the industry's leading IoT service platform in terms of the number of enterprises and service providers it serves.

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Jasper develops and provides a Software-as-a-Service platform with recurring revenue IoT business that manages and drives a range of connected devices and services for more than 3,500 enterprises and 27 service provider groups globally, said Rob Salvango, Cisco's vice president of Cisco's Corporate Business Development, in a blog post.

"Jasper recognized early on that in order to support its enterprise customers, it needed to tightly integrate with service provider networks. This strategic decision was game changing -- it helped them create an expansive recurring revenue-based business model that offers more breadth and reach than any other IoT player today," said Salvango in the post.

Jamie Shepard, senior vice president of strategy and health care at Lumenate, an Addison, Texas-based Cisco partner, said the acquisition will help his company better align itself with Cisco to drive IoT revenue.

"Cisco is giving us an opportunity to walk into the world's most sophisticated firms, no matter where they are, and help architecture [an IoT] solution," Shepard said. "They're giving us a great mechanism to have bigger, deeper discussions, and that's going to continue to drive our Cisco practice."

In a statement, Cisco CEO Chuck Robbins said the acquisition will accelerate how customers recognize the value of IoT.

"Together, we can enable service providers, enterprises and the broader ecosystem to connect, automate, manage and analyze billions of connected things, across any network, creating new revenue streams and opportunities," said Robbins in the statement.

Jasper's IoT service platform automates the management of IoT services across devices and enables companies to create new business models. The acquisition allows San Jose, Calif.-based networking giant Cisco to offer a complete solution that is interoperable across devices and works with IoT service providers, application developers and partners.

Matt Duncan, director of GDT Labs at General Datatech, a Cisco Gold partner ranked No. 45 on CRN's SP500, said the acquisition is "good news for everybody," because more IoT vendor integration is better for business.

"The more places to integrate, the better. The more tools we have, the better," said Duncan. "It helps us a lot, because we're having a lot of conversations with customers in the IoT space, [talking about] what it means to them to monetize these efforts in different ways. We're exploring those option internally for ourselves as well as for our customers."

Cisco is paying $1.4 billion in cash and assumed equity awards, plus additional retention-based incentives, for Jasper. The hefty price tag caught some partners off guard.

"[The price] is no drop in the bucket, that's for sure," said Michael Girouard, executive vice president of sales at TekLinks, a Birmingham, Ala.-based solution provider and Cisco Gold partner. "Chuck [Robbins] wanted to move fast -- he said he was going to move fast. They've made some investments in IoT organically and inorganically. This is a pretty bullish move by Cisco."

Jasper CEO Jahangir Mohammed will run Cisco's new IoT Software Business Unit under Rowan Trollope, Cisco senior vice president and general manager, IoT and Collaboration Technology Group. The acquisition is expected to close in the third quarter of fiscal year 2016.

In October, Cisco unveiled its plan to purchase IoT data analytics specialist ParStream.