Cisco announced today it will acquire privately-held video delivery software vendor NDS for $5 billion. The deal is expected to close in the second half of 2012.
NDS develops software that enables service providers to deliver content. The NDS technology will be complementary to what Cisco's Videoscape networking initiative delivers from an infrastructure perspective. The acquisition will also move Cisco further into the software space.
Cisco CEO John Chambers explained during a webcast with press and analysts, that the acquisition of NDS will move his company more towards becoming a software company.
"It will move us into the cloud and move us even closer to deliver solutions to our customers both in terms of software and also professional services," Chambers said.
The NDS technology fits into Cisco's Videoscape vision which is all about enabling the network for video content delivery. NDS executive chairman Abe Peled noted that his company today has technology deployed in over 125 million homes worldwide. Peled explained that his company's technology is all about enabling a seamless customer experience for viewing content in an easy and intuitive way.
"The trick in technology is to take the complexity away, allowing it to be used in a simple fashion" Peled said.
Once the acquisition is completed, Peled will be reporting to Marthin De Beer, senior vice president of the Video and Collaboration Group at Cisco. De Beer emphasized that NDS is a perfect fit to fully enable Cisco's portfolio of solutions.
"The network is the platform to deliver not just broadcast, but broadband solutions and content to consumers," De Beer said. "The cloud becomes the virtual delivery engine of that content and the client, as long as it's a consistent easy-to-use user experience, really enables and facilitates the easy access to the content."
De Beer stressed that the model only works when there is powerful software that can tie all the different pieces together. Based on what Cisco already has and what NDS will now bring to the table, De Beer is confident that Cisco can now complete the picture.
"It enables us to have a market leading portfolio that spans the cloud to network to client," De Beer said.
As part of Cisco's overall corporate strategy, video has a critical role to play.
"Video to me will not only be the next voice, it basically will be the way we communicate, the way we collaborate and it will be the foundation for all forms of IT," Chambers said.