How the Acquisition of NDS Accelerates Cisco’s Video Entertainment Strategy

March 15, 2012 - 4 Comments

We are on the cusp of a whole new wave of digital entertainment experiences that will make video content much easier to find, navigate, interact with and enjoy, on any device and network. Today, Cisco took another important step towards realizing that vision by announcing its intention to acquire NDS Group Ltd. a leading provider of video software and content security solutions that enables users to intuitively view, search and navigate across digital content anytime, anywhere and on any device.

Video is transforming every aspect of our lives. Telemedicine services in New Mexico are helping patients in underserved communities to secure video consultations with expert doctors many miles away. In India, classrooms in tiny rural villages are now being taught by remote teachers using Webex video. We’re even seeing technology that lets us use video to try on dozens of outfits without ever stepping into a fitting room.  For thousands of business professionals around the world, attending a meeting with colleagues, customers and partners in some far flung corner of the world via TelePresence is a routine part of their day.

It’s impossible to argue with the transformational power of video, but perhaps the most noticeable changes are happening right in our own homes, and on our mobile devices.

Television has been truly transformed in the past decade, from a one-way inflexible viewing experience, to a highly dynamic one, which can be time-shifted and enjoyed on an increasing array of digital video devices. But this is only the beginning of an exciting journey.

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. 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.

This video market transition is of critical importance to our service provider customers (a segment that provides a third of all Cisco revenues) and to our overall multi-billion dollar video business. NDS will complement and accelerate the delivery of our Videoscape platform to customers and transform how service providers and media companies deliver next-generation video experiences to subscribers worldwide.

NDS’s customer portfolio will broaden Cisco’s presence into new segments of the service provider market. It will expand Cisco’s reach into emerging markets where NDS has a strong footprint with customers such as CCTV in China and Bharti and TataSky in India. Importantly, NDS’s software platform and services capabilities will enable Cisco to deepen its partnerships with existing service provider customers globally.

The response to Videoscape from many of the world’s leading service providers has been excellent. Rogers Communications and TELUS of Canada, YES of Israel, Numéricable of France, Telenor of Norway, and  Korea Telecom have already selected Videoscape to deliver their next-generation video services.

With the addition of NDS, we are very confident that this momentum will only increase.

I am delighted to welcome Abe Peled, executive chairman of NDS,  and his team to the Cisco family, and look forward to a prosperous and industry-transforming future together.

Editor’s Note:

Cisco’s acquisition of NDS is subject to regulatory review.  We expect the acquisition will close in the second half of this year.

This posting contains forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the expected benefits of the acquisition to Cisco and its customers, the time frame during which the acquisition is expected to close, and plans regarding NDS personnel.  Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including, among other things, obtaining regulatory approval of the acquisition, the potential impact on the business of NDS due to the uncertainty about the acquisition, the retention of employees of NDS and the ability of Cisco to successfully integrate NDS and to achieve expected benefits, business and economic conditions and growth trends in the networking industry, customer markets and various geographic regions, global economic conditions and uncertainties in the geopolitical environment and other risk factors set forth in Cisco’s most recent reports on Form 10-K and 10-Q filed on September 14, 2011 and February 21, 2012, respectively.  Any forward-looking statements in this posting are based on limited information currently available to Cisco, which is subject to change, and Cisco will not necessarily update the information.

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  1. The remaining bottleneck is still in-home connectivity. It’s time for fiber optics in the home….. Lets see Cisco provide USB3 connections so I can connect all my devices with USB3 over fiber optics…. 2 channel 5Gbps EMI-free connections is now both possible and available… Where’s Cisco?

  2. Video and rich media will add a big value for an company. The impact of technology on sales is huge.
    Customers can be reached on so many ways true smartphone or video adds.

  3. I haven’t heard or read anything about this will be paid for. It says that it’s an all-cash deal. Does this mean that the company is using $5B in cash being held offshore?