Cisco Systems executives say their deal to buy NDS Group for $5 billion will not only make the company a larger player in the video communications space, but also is further proof that, in a world of cloud computing and ubiquitous connectivity, networks are key.
Cisco on March 15 announced its intent to by the British-based NDS, which offers set-top box software and services to a host of cable and satellite operators worldwide, including such companies as DirectTV, Cox Communications and Cablevision.
The move marks Cisco's most significant video-related acquisition since the company bought rival telepresence vendor Tandberg for $3.3 billion last year, and the largest since its bought cable set-top box maker Scientific-Atlanta for $6.9 billion in 2006.
It also comes less than a year after Cisco spent $99 million to buy BNI Video, a small Massachusetts firm that made video-delivery software for service providers.
The NDS deal also will give Cisco greater expertise in software and professional services, Cisco President and CEO John Chambers said during a Webcast discussion of the acquisition.
NDS, which earned $252 million on $1 billion in revenue in 2011, offers a variety of video software and security solutions aimed at enabling service providers and media companies to bring video to a host of devices beyond the traditional television, including PCs, smartphones and tablets. Its offerings dovetail with efforts Cisco has been making in the video space, particularly with its Videoscape offering, which was released in January 2011. Videoscape, which spans the network, cloud and consumer devices, is sold to service providers and enables consumers to find and watch pay television content on their choice of devices.
"While clearly a substantial acquisition and major landmark in Cisco s history in its own right, today s acquisition is the latest in a series of milestones for Cisco s Videoscape strategy," Marthin De Beer, senior vice president of video and collaboration at Cisco, wrote in a post on Cisco's blog site. Videoscape is Cisco s vision and platform for the creation of new visual, mobile and social video entertainment experiences through the convergence of digital TV, online content, and social media and video communications applications.
The NDS acquisition, which is expected to close in the second half of 2012, further illustrates the changing nature of video entertainment, where consumers are increasingly demanding to be able to access high-quality video wherever and whenever they want.
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