Cisco Systems (CSCO) is one of the world's leading information technology and networking companies. As of November 1, 2019, Cisco had a market cap of $199.59 billion and was the largest company in the networking and communications devices industry.
Cisco is focused on continuing its leading role in its industry and has a pattern of acquiring companies in three categories: market acceleration, market expansion, and new market entry.
These five companies stand out among Cisco's acquisitions over the past few decades.
In 2015, Cisco acquired OpenDNS for $635 million in cash. OpenDNS is a cybersecurity company that provides advanced threat protection for any device at all times.
Cisco used the acquisition to expand its Security Everywhere strategy by adding enhanced visibility, protection, and threat intelligence from the OpenDNS cloud-delivered platform for potential entry points into networks. OpenDNS offers solutions for both businesses and personal consumers – providing its services for tens of millions of users while boasting about its impressive uptime performance.
Cisco purchased Meraki in 2012 for a whopping $1.2 billion. Meraki is a leader in cloud networking and helped to expand Cisco's technology to manage Wi-Fi networks. Meraki offers mid-market customers with networking solutions that they can manage remotely from the cloud.
Cisco's acquisition led to the formation of its Cloud Networking Group, and Meraki provided scalable network solutions to users. The acquisition also expanded Cisco's strategy to provide customers with a greater number of software-related solutions.
Cisco acquired Sourcefire in 2013 for approximately $2.7 billion. On July 23, 2013, Cisco agreed to pay $76 per share in cash, at a premium of nearly 30%. Cisco's purchase of Sourcefire merged its technology, product, and research and development (R&D) teams to provide cybersecurity solutions.
Before merging its products and technologies, Sourcefire was a leading cybersecurity company that provided advanced threat protection from the cloud. This addition greatly advanced Cisco's threat protection portfolio.
In 2012, Cisco acquired British software company NDS Group for approximately $5 billion. The acquisition advanced Cisco's Videoscape strategy, which aimed to create entertainment experiences through social media, video, and television.
NDS Group, now known as Cisco Videoscape, is a provider of video software and content security solutions that let companies securely deliver and monetize entertainment experiences.
On March 22, 2016, Cisco acquired Jasper Technologies for $1.4 billion in cash. Cisco Jasper provides a cloud-based internet of things (IoT) platform that allows companies to launch, manage, and monetize IoT services. Jasper is the leading platform in the IoT industry and enables many of the world's largest companies to connect any device over cellular networks and manage the IoT services connectivity through its software as a service (SaaS) platform.
Cisco's acquisition of Jasper allowed the company to provide business enterprises with a complete IoT service platform. Jasper is Cisco's IoT cloud business unit and provides cellular connectivity to thousands of companies, partnering with a large number of global service provider groups. Cisco is building on Jasper's technology to also provide IoT security and analytics solutions to help its revenue growth.
The Bottom Line
Cisco has continued to be one of the world’s largest and most successful networking companies. The company's growth of its product and services portfolio is primarily based on strong outside acquisitions to help Cisco go after the cloud and software market.