Cisco Buying IoT Analytics Company ParStream

Cisco will inherit ParStream's analytics database technology, which will enable customers to analyze IoT data at the edge of the network.


Cisco Systems is bolstering its capabilities in the Internet of things with the acquisition of ParStream, whose analytics database technologies enable organizations to more easily store and parse large amounts of data at the network's edge.

Cisco officials expect the number of connected devices that will make up the Internet of things (IoT) to jump from about 25 billion last year to more than 50 billion by 2020 (predictions from other vendors and analysts firms vary, but all call for a huge jump in the number of things) and present businesses worldwide with a $19 trillion opportunity. IDC analysts expect IoT spending to hit $1.7 billion in 2020.

However, while the growth in the number of connected things—from cars, home appliances and industrial systems to medical equipment, sensors, mobile computing systems and wearable devices—is impressive, the real benefit of the IoT will come with the massive amounts of data that they will generate. Dell CEO Michael Dell at the Dell World 2015 show last week put the amount at 44 zettabytes—that's a 1 followed by 21 zeros—by 2020.

Companies and other organizations are going to want to be able to quickly collect, store, access and analyze the data to gain important usable insights and information that will help them make decisions that will benefit them and their customers. Cisco and a broad array of other tech vendors—such as Dell, Intel, Oracle and IBM—are launching products that will enable businesses to capture and analyze the data at the edge of the network and closer to the endpoints, which will lead to faster and better decisions.

"ParStream's technology, for example, can help a renewable energy company track and monitor thousands of wind turbines at once by providing the information to optimize the performance of each turbine and quickly adjust to changing environmental factors like wind direction and temperature," Rob Salvagno, vice president of corporate business development, said in a post on the company blog Oct. 26 announcing the acquisition. "Instead of sending this data to a centralized server, now a company can store the data at the edge of the network, closer to the turbines and sensors, and track results even across a highly distributed network. Real-time access to data derived from the connected equipment can lead to benefits like decreased equipment downtime through predictive maintenance, increased productivity, and historical analysis of environmental patterns."

No financial details on the deal were released, and the acquisition is expected to close later this quarter. ParStream employees will be integrated into Cisco's Analytics and Automation business within the vendor's Data and Analytics Group.

In a post on his company's blog, ParStream CEO Peter Jensen looked to lessen any customer concerns about what the deal will mean to them, saying that the company's top priority has always been "your satisfaction in our delivery and pursuit of excellence."

"Although our day-to-day business operations will not change, in the coming weeks and months you'll see us shift into overdrive," Jensen wrote. "We'll be empowered by Cisco to innovate in new ways and to share all the benefits of being part of a world-class company with you. Our focus remains on delivering the technology and solutions you need to drive success in your business."

ParStream, which reportedly had raised about $14 million since it was launched in 2011, had been part of Cisco's Entrepreneurs-in-Residence program for startups.

Cisco made a significant move in the IoT analytics space in December 2014 when officials rolled out a broad range of data analytics capabilities that targeted an array of markets—including retail, mobility and telecommunications—and addressed dealing with data wherever it is, such as the data center or in the endpoints at the edge of the network. The push included enhancing the analytics capabilities into such hardware as routers.

Other vendors are making similar efforts. Most recently, Dell on Oct. 20 announced the Edge Gateway 5000 series, an Intel-powered appliance that includes the latest version of the company's Statistica data analytics software designed to gather, aggregate and analyze the data coming from the edge devices.