Cisco bags Iteris for smart city transport service, potential new subsidiary?

Cisco and Intelligent Traffic System (ITS) provider Iteris have partnered, on a project with the City of Las Vegas, to deploy a traffic optimization system. As Cisco expands into the automotive world, we wonder whether buying a provider such as Iteris would make sense, especially as it would be pocket-change for the networking titan.

The deal itself will see Iteris’ Vantage Next video detection platform with Cisco’s Kinetic IoT platform, which has a number of skews depending on the desired application – such as manufacturing, oil and gas, retail, cities, and transportation. Kinetic has three main components; the Gateway Management Module (GMM), the Edge and Fog Processing Module (EFM), and the Data Control Module (DCM). Collectively, they gather and move data to the cloud-based applications, where that information can be transformed into some form of usable insight. Cisco is also hawking the networking hardware that connects the necessary equipment to the internet, and thus its Kinetic platform.

Iteris, meanwhile, specializes in three main areas – smart cities, connected vehicles, and digital farming. Its agricultural services center around weather, crop, and soil and field analysis, using a mixture of sensors and software. The transportation side of things is focused on traffic flow monitoring, intersection and pedestrian monitoring, and ITS services.

Unsurprisingly, the Cisco partnership is focused on the transport side of things, and to this end, we see Iteris as a company that might attract suitors looking to split it in two. The likes of Cisco would like the transport assets, while there are a number of suitors that might be interested in snapping up a services provider for the looming Smart Agriculture boom.

As such, Cisco might consider buying Iteris, a company with a market cap of just $132mn. For Cisco, with its market cap of $195.5bn, it would not be much of a stretch to sign the checkbook for the provider, and with Cisco’s scale, it should be able to sell the Iteris portfolio into the governmental and city deals that it is pursuing.

The initial partnership is going to revolve around analyzing data from vehicles, bicycles, and pedestrians, in order to improve traffic flow and reduce congestion in Las Vegas – a city that has a relatively large amount of foot-traffic thanks to its tourism industry.

“Las Vegas is renowned for its heavy pedestrian traffic, so we are constantly working to deploy innovative, multimodal technologies to better manage the flow of vehicles and people,” said Michael Sherwood, director of information technologies at the City of Las Vegas. “Iteris’ integration with Cisco’s Connected Roadway solution will produce insights that highlight the advantages video detection and advanced networking can have on a city’s transportation system.”

The two vendors are also starting a partnership agreement that will see them target smart city initiatives through a joint marketing and sales strategy, focused on drumming up business in the US. This will see Cisco shipping communications equipment (switches, gateways, edge-processing boxes) and software, which will be able to support Iteris’ Intersection-aaS offering. The pair add that Iteris video and radar detection sensors will be integrated into Cisco’s Kinetic PaaS later this year.

The city represents one of the best use-cases for edge-computing, or fog computing as Cisco likes to call it. Even minor faults in a traffic control system can have huge ripple effects, with one jammed intersection leading up to city-wide congestion – and the lost economic value, increased air pollution, and frustrated population. This is why ITS systems are proving so popular, and in time, Cisco’s equipment could provide a distributed compute platform on which a city could run all manner of application workloads – all housed under the smart city umbrella.

Similarly, vehicle-to-infrastructure (V2I) and vehicle-to-vehicle (V2V) communications are another great opportunity for Cisco, building on its software and networking presence in the vehicles themselves by linking these cars to the street infrastructure and other vehicles nearby. Cisco’s Jasper wing, an IoT Connectivity Management Platform, already connects millions of vehicles, and in time, Cisco should be able to gain a pretty comprehensive view of how connected cars are used, and how they interact with the world around them.

As such, moving into the ITS sector seems like a natural evolution for the company. With Iteris, it would pick up a collection of proven senor hardware, and software and services that would apparently be put to use augmenting Cisco’s Connected Roadways offering – which Iteris will also be promoting as part of the partnership.