Done Deal: Cisco Acquires Tandberg by Gary Hall

4/23/2010 11:23:33 AM
By PSN Staff

Earlier this week, tech giant Cisco completed its acquisition of Tandberg and put a period at the end of the AV and IT convergence story.

I discussed the impact of this acquisition when it was announced, but I didn't realize at the time how serious Cisco was about transforming the way the world works and communicates. Back then I thought the main reason they were getting into video was to sell more routers. In the past few months I've been slowly putting together the pieces to better understand Cisco's strategy and I was surprised by what I found. First, before the Tandberg deal was ever announced Cisco had already purchased WebEx, Jabber, and Pure Digital Technologies. Those acquisitions brought Cisco industry leaders in webconferencing (WebEx), Presence (Jabber), and user generated video (Pure Digital - makers of the popular Flip handheld digital video recorders). Going back even further reveals that Cisco invested heavily in telephony, particularly in Voice of Internet Protocol (VoIP) technology in the late 90s and early 2000s by acquiring a dozen companies that specialized in VoIP. They also made strategic moves by acquiring Precept Software (IP television), V-Bits (digital video), Scientific Atlanta (digital cable), Arroyo Video Solutions (video on demand), Tivella (digital signage), Five Across (social networking), and Post Path (email). They have also made major acquisitions in mobility, WiMax, and video surveillance. They are clearly positioning themselves to be a major player in the AV community.

The big deal is that Cisco has systematically pulled together all of the elements of today's and tomorrow's unified communications systems. Tandberg fills in a major gap by adding videoconferencing endpoints and infrastructure into their product portfolio. Adding up all of these acquisitions and combining them with Cisco's home grown products including Telepresence, MeetingPlace, and the Carrier Routing System, CRS-3, and you start to see Cisco's strategy for overhauling the Internet, communications, and mobility by creatively intertwining them. If you missed Cisco's announcement of the CRS-3 back in March, the press release boasted that this router could allow, "every man, woman and child in China to make a video call, simultaneously; and every motion picture ever created to be streamed in less than four minutes." Oh yeah, and they even put an IP router in space so they could bring things like telepresence to places that don't have sufficient terrestrial network connectivity and need to rely on satellite communications. This is particularly important for the military since they operate on boats, in the air, and in locations on the earth that don't get Verizon and Comcast service.

There are a few interesting side notes to the Tandberg acquisition that have not gotten much attention. The first is that the European Union required Cisco to divest it's Telepresence Interoperability Protocol (TIP) to an industry organization. This will help to ensure competition in the visual communications market and will allow other companies to develop solutions that will work with Cisco's products. The other impact of the Tandberg acquisition is that Cisco now has access to the traditional AV sales channels that have not been available to many IT companies. They are clearly taking these channels seriously and even have their Senior Vice President of Emerging Technologies presenting the Keynote address at InfoComm 2010.

Cisco is not the only company to understand the power of audio and video. They have made the biggest splash in AV industry acquisitions so far, but Microsoft, Google, Apple, HP, and many more IT heavyweights are developing strategies and products to take advantage of the evolution of Internet into a visual medium. The Internet is just repeating the same pattern that recorded communications has already followed from books (text) to audio (radio) and on to video (television). All three elements are critical to effective communications, but there is something special that happens when they are all used together. Over the next few years we'll see AV technology change our work, communications, and entertainment.

Gary L. Hall is the Geospatial Metadata Officer at National Geospatial - Intelligence Agency in Washington, DC., and the CEO of LocalShare and The New Green Economy.

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