Cisco Systems (NASDAQ: CSCO) is abandoning its efforts to enter a once promising market. The company decided to significantly reduce its smart city products and services division in favor of dedicating resources to other company initiatives.
“We recently decided to stop sales and eventually offer support [for] Cisco Kinetic for City [sic] product line to align our product investment with evolving market needs and customer requirements, “said a Cisco spokesman Wall Street Newspaper.
The company’s efforts in the sphere had a major boost in 2016, when it acquired Internet of Things (IoT) technology specialist Jasper Technologies in a $ 1.4 billion deal in 2016. At the time, the buyer said Owning Jasper “would allow Cisco to offer a complete IoT solution that is interoperable across devices and works with IoT service providers, application developers and a partner ecosystem.”
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IoT devices and technologies are the foundation of smart cities – comprehensive digital initiatives that promise to modernize and automate much of the infrastructure that sustains cities around the world. Jasper was the cornerstone of Kinetic for Cities, a smart cities IoT unit that was created in 2017.
The division closes after several quarters of Cisco’s revenue decline. As with many companies in a variety of sectors, the network equipment giant has been hit hard by budget cuts. This is due to the fact that customers reduce their spending on such products and services due to the deleterious economic effects of the coronavirus pandemic.
Investors seemed cautiously optimistic about Cisco’s withdrawal. The shares were up almost 0.9% on Monday, almost equaling the gain of the S&P 500 index.