Cisco’s acquisition spree continues to roll in 2016.
The networking giant said on Tuesday that it will pay $260 million for cloud computing startup CliQr, whose technology lets corporate software run more efficiently across internal data centers and public cloud data centers operated by the likes of Amazon (AMZN), Microsoft (MSFT), and Google (GOOG).
Cloud management software, like what CliQr sells, is a hot commodity among companies looking to save money by being more flexible about their data center operations than being locked into a single vendor. The startup’s technology is essentially a benchmarking service that can evaluate the pricing and features of cloud providers, and then figure out the cheapest way for a company’s software to run on those environments.
Rightscale sells similar technology as does Scalr, and business technology giant Dell which purchased Enstratius, a cloud management vendor, in 2013. Even retail giant Walmart (WMT) released its own open source cloud management software that the company said developers can download for free and use to run their software on multiple clouds and company data centers.
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Cisco and CliQr have already worked to integrate their respective technologies, so the acquisition isn’t a total surprise. Like IBM (IBM) and Hewlett Packard Enterprise (HPE), Cisco sees big business in the so-called hybrid cloud scenarios in which a company’s internal infrastructure works in conjunction with that of cloud providers.
The networking giant has been criticized for being late to the cloud. To compensate, Cisco as well as other legacy enterprise companies have been spending millions buying up smaller startups to catch up in cloud computing where Amazon Web Services currently reigns.
Cisco CEO Chuck Robbins said the weakening technology market and its impact on startups will help big companies like Cisco that may be shopping for companies to buy. Earlier this month, Cisco said it would pay $1.4 billion for Jasper Technologies, a startup that makes software for managing Internet-connected devices like Coca-Cola’s web-connected vending machines.
“The reality is that the public IPO markets are effectively closed right now,” Robbins said in an interview with Coins2Day. As a result, startups are now looking at buyers that can provide an exit, he explained.
“It certainly makes for a different set of conversations we were having a year ago,” said Robbins about how startups are dealing with the economy.
As for the decline in global technology spending that he acknowledged in Cisco’s latest earnings, Robbins said that his company is still “in a sort of wait and see mode.”
However, he explained that the so-called Internet of things, in which everything from cars to home appliances to factory equipment are connected online, has made companies want “to fundamentally change their business strategy through technology.” Presumably, this means that companies will eventually increase their spending to stay on top of technology trends, regardless of a weakening market.
“For those customers that are looking at connecting a thousand mining operations or a million elevators, they are looking at this as a core part of their business strategy in the future, and I think you are going to continue to see them to move,” Robbins said.
Cisco expects the CliQr acquisition close in its third quarter. About 100 people will join Cisco from CliQr as part of the deal.
The startup has raised a little under $40 million in funding with backing from Alphabet’s venture capital arm GV, among others.