Cisco Buys ThinkSmart Technologies

Cisco Systems Inc. (CSCO - Analyst Report) recently announced that it has acquired a start-up company ThinkSmart Technologies, which develops location analysis solutions using Wi-Fi technology. The terms of the deal were not disclosed.

Cork, Ireland-based ThinkSmart is a software company that enhances a wireless network infrastructure by providing location analytics to service providers and enterprise customers. The software provided by the company enables the collection of information on movement within a venue, including the time of day, traffic patterns and the length of time a user spends in a particular area. This data helps to optimize business processes and helps in better time management.

Upon the completion of the deal, ThinkSmart will be integrated within Cisco Mobility Services Engine (MSE) and join Cisco’s Wireless Networking Group. The deal will allow the company to expand and differentiate its offerings with regard to networking infrastructure. The acquisition will enable Cisco to improve customer experience, ensure cost savings and thereby generate more revenue.

Management also stated that ThinkSmart’s specialized Wi-Fi network and its analytics capabilities can help improve customer experience at public places such as retail locations, hotels and airports.

Cisco Systems is a leading provider of IP-based networking and other products. Although Cisco is taking steps to lower its cost structure by reducing headcount, it is not ignoring growth opportunities. The company’s fourth-quarter earnings beat the Zacks Consensus Estimate by 3 cents and revenue was up 4.4% from the year-ago quarter.

Cisco is no doubt the networking leader, but competitors like Juniper Networks (JNPR - Analyst Report), Hewlett Packard Company (HPQ - Analyst Report) and F5 Networks (FFIV - Snapshot Report) are gradually picking up market share.

Cisco carries a Zacks #2 Rank, implying a Buy rating over the next one to three months.