Cisco announces intent to buy IoT real-time data analytics startup ParStream
Mark Haranas / CRN :
Context & Ripple Effects
In late October 2015 Cisco was on a rapid tuck-in cadence: two days after announcing intent to buy IoT real-time analytics startup ParStream, it closed the cloud video startup 1 Mainstream, founded by ex-Roku, Apple, and TiVo executives. Both deals point the same direction — Cisco layering software and data services onto its networking hardware base.
ParStream matters as the first move in what became a sustained analytics shopping spree: within four months Cisco paid $1.4B for Jasper, the IoT device-connectivity platform that dwarfed the earlier buys and gave the strategy its centerpiece.
First-order effects
- ParStream's German-founded team and its real-time analytics engine are absorbed into Cisco's IoT portfolio, giving Cisco in-house stream processing it previously lacked.
- Cisco's IoT pitch to industrial customers shifts immediately from selling connectivity hardware to selling connected hardware plus analytics on top.
Second-order effects
- The ParStream buy set the template Cisco then scaled with Jasper — a platform play connecting IoT devices — forcing other network-equipment vendors to decide whether to build or buy their own analytics layers.
- IoT analytics startups become prime acquisition targets rather than independent vendors, compressing their exit timelines and pricing them against Cisco's willingness to pay.
Third-order effects
- If the pattern holds — Perspica later folded into AppDynamics' real-time processing, Springpath into data center software, CloudCherry into customer analytics — Cisco structurally converts from box vendor to an integrated data-and-analytics stack company.
- Serial tuck-ins concentrate IoT data-processing capability inside a few large infrastructure vendors, narrowing the field for standalone real-time analytics firms seeking enterprise distribution.
The trend: Infrastructure vendors like Cisco are systematically acquiring analytics and machine-learning startups to climb from selling connectivity to selling the data services that run over it.