Wednesday, Cisco announced its intention to purchase Jasper Technologies, a provider of cloud service for internet-powered devices. As per the terms of the deal, the SanJose-based Cisco will pay 1.4 billion US dollar in cash as well as assumed equity grants. In addition, the company will also pay extra incentives based on retention.

The merger will enable Cisco to provide a full IoT solution which is interoperable through devices and coordinates with application developers and IoT service providers. Cisco said it will construct upon the IoT service platform of Jasper and include fresh IoT services like security for connected instruments, innovative analytics to cope up with device usage efficiently and Wi-Fi for enterprises.

The transaction, which is subject to customary closing conditions, is anticipated to end in the third quarter of 2016. Cisco noted that Jahangir Mohammed, CEO of Jasper, will run the fresh IoT Software Business division under Rowan Trollope, SVP and general manager of Cisco IoT and Collaboration Technology Group.

Jasper simplifies IoT complexities like collecting and scrutinising data as well as securing and connecting millions of instruments. Japer's IoT platform allows firms to create fresh business models which convert their set of products into connected devices. In addition, the IoT platform enables enterprises to produce fresh sources of revenue.

Moreover, Jasper supplies SaaS platform that manages a different range of connected instruments for over 3500 companies globally. Chuck Robbins, Chief Executive Officer of Cisco, said that with Jasper Cisco can enable its customers to mechanise, connect, analyse and manage a wide variety of connected things through any network. According to Jahangir Mohammed, CEO of Jasper, the merger will aid companies and mobile operators around the world to speed up their success in IoT platform.

Forbes said that Jasper had raised over 190 million US dollar since its existence in 2004, most currently at a 1.3 billion US dollar valuation, according to Pitchbook. The companies did not reveal the growth metrics or revenue for Jasper under the deal. Forbes quoted Gaurav Garg, a board member of Jasper, who said the merger will fasten the growth of the Internet of Things for clients. However, Garg failed to comment on the company's valuation and price tag.

According to CNBC, Cisco's acquisition price is similar to the private market valuation of Jasper. In July, Jasper counterfeits an agreement with the software leader Microsoft promising to carry its technology to firms using Azure cloud system and entered into a similar deal with IBM after three months.

This merger will accelerate the growth of IoT industry and enables customers to manage and analyse their connected devices. It will also stimulate firms to increase their sources of revenue.