Cisco invests in a future dominated by video
Cisco Systems, the networking equipment manufacturer has participated in a number of significant investments and deals to support their Visual Networking Index Forecast they made last year. In this forecast they stated that they expect video to account for as much as 90% of all Internet traffic by 2015, with overall traffic worldwide growing to 966 exabytes per year from 3 billion Internet users and 15 billion network-connected devices like smartphones, tablets and pc’s.
These investments include British pay-TV software company NDS Group, which they announced in early March that they were acquiring for $5 billion from News Corp. NDS is a globally leading pay-TV middleware and conditional access corporation and this acquisition will enable Cisco to move into higher-margin video platform software and services; though $5 billion is a greatly inflated price to pay, especially considering last December NDS filed for an intended IPO worth just $100 million and are currently subject to serious accusations of hacking and then distributing pirated access to its main competitors in both Australia and Britain.
To support its video technology services Cisco has also acquired companies that will enable them to help service providers ease pressure on their networks. The first of these was newScale in May 2011 and this week they acquired the software division of promising startup ClearAccess for an undisclosed amount. ClearAccess is seen as one of the most promising up-and-coming technology firms around and recently acquired investment of $10million from Oregon Angel Fund. With ClearAccess Cisco is acquiring cloud-based services that will enable its Internet service provider customers to monitor and manage increasing data usage by their users and help resolve issues of rapidly growing Internet traffic, increasing network complexity and a proliferation in the number and types of mobile devices connecting to their networks.
ClearAccess is not the only cloud technology Cisco is interested in and they have also partnered with
telecom operator CTM to launch various services including Cisco CloudVerse, Cloud Infrastructure Service, Cloud Intelligent Network and “Business Talk” Unified Communication Service. With these services Cisco will be able to help organisations to build, manage and connect clouds of all kinds with high loads, increased speeds and greater security without needing multiple hardware upgrades and other maintenance-related expenses.
While Cisco has invested heavily in video technology and cloud computing, they will not have things their own way and will face competition from major rivals like IBM, Polycom and much more affordable competitors like Blue Jeans Network. They have made some concessions by introducing Cisco Callway, a $99-per-month-per-endpoint subscription service but like much of Cisco’s products and services its designed to only work with other Cisco products. This embedded policy has long been a source of frustration for Cisco’s customers and if Cisco wants to benefit from its investments and succeed in the future, it will need to provide access its technology.