Cisco to Acquire Tropo

On May 7, Cisco posted the following to its blog.

Cisco has been on a mission to make collaboration super-simple. From our video devices that require no user’s manual, to our cameras that sense and automatically adjust when the speaker suddenly stands and walks to the white board, we’re paying attention to the details; we’re making collaborating less frustrating and providing a better user experience—so we can all get great work done.TropoLogo

With our laser focus on simplicity, it should come as no surprise that we’ve given lots of thought to real-time embedded communications. Given the market transitions of mobility, cloud, and the Internet of Everything, companies are seeking simpler and faster ways to communicate—both internally and externally—from any device in real-time through the cloud. The need for next-generation communications and collaboration platforms with modern, easy-to-use APIs is more important than ever. To address this growing need, Cisco is pleased to announce its intent to acquire Tropo, a privately held company providing a cloud API platform that makes it simple for customers and developers to embed real-time communications within their applications.

Helping people connect, engage and innovate on any device, Cisco and Tropo will provide a collaboration platform-as-a-service, which allows our customers and developers to create and sell new communications services with minimal development effort.

Tropo’s robust APIs and its 200K+-strong developer network gives Cisco the ability to extend the power of its collaboration technologies to third-party applications and end-points. Together, Tropo and Cisco will benefit:

• Service Providers: Tropo’s technology will enable developers to build applications that integrate into the Service Provider’s existing communications infrastructure, providing the Service Provider with an advantage over OTT competitors and ways to generate new sources of revenue.
• Global Enterprises: Tropo’s APIs will allow IT departments to build business applications that will reach end-users in new ways with voice and SMS.
• Developer Community: Cisco is committed to continuing to build out Tropo’s robust ecosystem through the addition of new functionality, best-in-class support, as well as adding a new layer of integration with Cisco’s existing collaboration products.

The Tropo team will join the Collaboration Technology Group under the leadership of Rowan Trollope, SVP and general manager. We look forward to bringing Tropo’s unique communications platform as a service as a key component into Cisco’s cloud collaboration platform, and welcoming Tropo’ strong team into Cisco’s Collaboration Technology Group (CTG). Together, we will help extend the Cisco platform to third party endpoints and applications via modern APIs and enable Cisco to better serve the developer community.

We expect the acquisition to be complete in the fourth quarter of fiscal year 2015. Financial terms are not disclosed.

Tropo isn't particularly well known. Conceptually it is similar to Twilio (don't mention that to the Tropo team). The companies are similar in that they both make telephony much less esoteric to programmers. The main difference is Twilio raised a ton of cash and expanded much quicker. Twilio built-out its own carrier servers, direct services, and international cloud. Tropo also makes services directly available as a public cloud service, but it concentrated more on enabling carriers and providers to extend their own network services with Tropo's technologies.

Cisco's move to acquire caught me off-guard, but the more I think about it the more it makes sense. Actually, surprised Tropo wasn't acquired sooner. Twilio, and its $100 million in revenue and expected upcoming IPO validates the market for cloud APIs.  Cisco could use Tropo to compete directly with Twilio or (more likely) to enhance its own solutions such as Cisco Spark with powerful APIs.

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