Industry On The Move: Cisco Acquisition Signals Rise Of 5G

As the rest of the world was gushing over the closing of IBM’s Red Hat acquisition, Cisco Systems quietly made is own acquisition this week that is also worthy of your attention.

What Did Cisco Announce This Week?

On July 9, Cisco announced that it is acquiring Acacia, an optical networking semiconductor maker. The deal, which was for $2.84 billion in cash, is expected to be finalized during 2020.

Acacia, founded in 2009, manufactures component technologies for telecom companies and data centers. It also creates algorithms for digital signal processing. Before the acquisition, Cisco was one of its top customers.

Once the deal is finalized, Cisco will continue to service Acacia’s existing customers with the same service offerings. It will also strengthen Cisco’s business portfolio.

“It gives us relevance,” Guy Diedrich, Cisco’s global innovation officer, told Bloomberg. “It gives us a technological advantage moving forward to meet the needs of our customers as we see this massive explosion in the digital age.”

What Does This Mean For Enterprises?

On the surface, it doesn’t seem like there is a direct impact on the enterprise because of this deal. The acquisition will help boost Cisco’s portfolio, especially towards telecom companies who are spending more to upgrade to 5G.

For enterprises that work with Cisco, this deal improves the security capabilities on its cloud platforms. It could help those organizations mitigate phishing incidents on mobile devices.

However, the significance of the acquisition is that it serves another sign that 5G is about to make its way into the enterprise. The number of global 5G connections could be between 20 million and 100 million in two years. By 2025, there could be over 1 billion 5G connections worldwide.

With the increased demand for 5G, optic interfaces will require more capacity and connectivity in order to support the next wave of data. One of the driving forces behind the rise of 5G will be the enterprise.

Organizations in several fields will benefit greatly from the fifth generation of mobile communications. Manufacturers will be able to improve the layout of factories thanks to the technologies. 5G will allow for more vehicle-to-vehicle communications in the transportation industry. Customers in retail and financial services will receive faster service as a result of 5G.

“We’re in the infancy of 5g,” said Diedrich. “The promise of 5G is around inclusion and connectedness. That’s what 5G is bringing to the world.”

The big takeaway from this recent Cisco acquisition is that 5G is coming, and enterprises should (if you haven’t done so already) prepare for it. This includes working with carriers and partners to ensure that your organization can handle 5G. It also means developing potential use cases for the technology in the enterprise. One area that could be leveraged includes mobile video, which will be more accessible thanks to 5G.