Cisco investing $150 million in early stage startups



Cisco Investments has allocating an additional $150 million over the next two to three years to fund early-stage companies and is focused on what the company refers to as next horizon "themes" to accelerate the development of disruptive technology markets, including big data and analytics; IoT; connected mobility; storage; silicon; the content technology ecosystem; and India innovation.

Cisco Investments, as part of this funding push, has made three investments in IoT accelerators and startups Alchemist Accelerator, Ayla and Evrythng

Related: The Internet of Things: increasing the security nightmare

"Our ability to identify and stay ahead of market disruptions is deeply rooted in our build, buy, partner and integrate approach to innovation," said Hilton Romanski, senior vice president, Cisco Corporate Development. "We gain valuable insight and an understanding of market trends through equity investments in young and interesting companies who are leading the way through new market disruptions. Our investments in Alchemist Accelerator, Ayla Networks and Evrything align with our focus on early-stage innovation and companies focused on the Internet of Things."

The Internet of Things is a big company play to take a hand in connectivity of devices particularly as cheaper hardware technologies and wireless networking technologies become ubiquitous. 

The concept of being able to collect data remotely and continuously creates an enormous opportunity for Cisco to sell networking gear to expanding network users. 

Strategically an expanding world of network devices favors Cisco but companies like Intel and Microsoft are going to struggle to identify revenue streams for their products because they are used to high-volume, monopolistic opportunities.

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However, if you take a look at companies like Ayla, for example, they are able to create and profit from building supporting infrastructure services for IoT and ultimately, they don't need to, and are unlikely to ever, reach Intel like proportions.

In that sense, IoT is disruptive because it is an extension of what the mobile web has done for enterprises and consumers by extending the reach of the Internet to any network-ready device. And, making any device network-ready gets easier and cheaper every day.

IoT is a great opportunity for startups and entrepreneurs but it may end up being a thorn in the side of traditional hardware and software companies. Cisco is betting on the network that it enables still being relevant.




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