Cisco to buy wireless sensor network firm Arch Rock

Cisco has gone spending crazy, announcing its intent to buy another company, this time an IP-based wireless sensor network firm called Arch Rock.

The San Francisco-based Arch Rock makes wireless sensors for smart-grid applications, which Cisco hopes to use to help the utility industry’s transition to “an open and interoperable smart grid.”

Arch Rock’s wireless sensor products connect smart meters and other devices over a scalable and secure multi-way wireless mesh network, which is an important step in the advance of smart-metering technology.

“Arch Rock’s wireless mesh technology enhances Cisco’s IP-based, end-to-end smart-grid offerings,” said Laura Ipsen, senior vice president and general manager of Cisco’s Smart Grid business unit.

The deal follows a recent alliance between Cisco and Itron aimed at developing ways to enhance smart-metering technology. It has only been a few days since that deal was announced, so clearly Cisco was already eyeing up Arch Rock during that negotiation process. The timing suggests it was keen to show the world, and its new business partner Itron, that it meant business in the smart-metering market.

This is perfect timing, as installation of smart electricity meters is expected to grow at a compound annual growth rate of 31.1 percent between 2009 and 2015, according to Berg Insight. Market penetration is expected to rise from its current rate of 15 to 20 percent to nearly 50 percent in Europe and North America, with Asia-Pacific growing from under one percent to 25 percent in the same period. By 2020 market penetration should be near 100 percent in most regions, giving Cisco a lot of potential customers.

Arch Rock also offers a product called Energy Optimizer, which allows industries to analyse energy usage of their data centres using Arch Rock’s wireless sensor technology. This allows a company to monitor how much power is being used in a certain area, what the temperate is, what the humidity levels are, and how high the CO2 levels are. 

Arch Rock says this can give upwards of a 40 percent energy saving for a data centre, which is pretty significant. Given part of Cisco’s core business is in servers and data centres, acquiring Arch Rock is a very logical move.

Over the last week Cisco has been spending like crazy, buying or offering to buy several companies. It bought ExtendMedia, a firm focusing on content management systems for multi-screen video, and there were even reports that it wanted to buy Skype.

The pace of these recent purchases raises some suspicions of exactly what Cisco is up to. They appear to be in different sectors and are mostly aimed at enhancing its current product offerings, but Cisco may surprise us all with a new product launch based on these acquisitions.

Financial terms of the deal were not disclosed. It is subject to a standard approval process and is expected to complete by the end of the year.