Chambers told an Atlanta newspaper that the set-top box business, which had been rumored to be on the selling block, is an important part of Cisco’s larger video strategy.
Cisco Systems
is in no hurry to sell its set-top box business, despite the networking giants
recent $5 billion bid to buy
video software maker NDS Group, according to President and CEO John Chambers.
Speaking to
the
Atlanta
Journal-Constitution recently, Chambers said video will remain a key business
focus for Cisco, and that the workers at the vendors set-top box business will
be responsible for much of the hardware and software that handles the rapidly
increasing video traffic.
Cisco is
looking to leverage its core network switches and routers and its growing
portfolio of video offerings to create solutions that enable businesses and
consumers alike to get any video service they want at any time and on any
device, he told the newspaper. The set-top box business, which Cisco inherited
in 2006 when it bought Scientific Atlanta for $6.9 billion, will be a key part
of that effort.
The business
has been the subject of rumors that Cisco was considering selling it.
This isnt
[about] set-top boxes, Chambers said in the news story, published March 24.
Its how you bring video into the home, into wherever. This is right now our
sweet spot for where we want to go.
Cisco
officials and others in the industry are expecting the amount of
Internet traffic worldwide to explode over the next few years, and see video as the key driver. By
2015, there will be 3 billion Internet users and 15 billion network-connected
devices, and 966 exabytes running over Internet networks, Cisco projected in
its annual Visual Networking Index Forecast, released last summer.
Video will be
what fuels that growth, and Cisco executives believe the company will play a
central role.
Video will be
the new voice, Chambers said during a March 15 Webcast discussing the NDS
deal. It will be pervasive, on any device ¦ anytime.
The NDS
dealthe largest for Cisco since Scientific-Atlantawill make Cisco a larger player
in the video delivery market. NDSs video software and security solutions
enable service providers and media companies to bring video to a variety of
devices beyond traditional televisions, including PCs, tablets and smartphones.
It dovetails with Ciscos Videoscape service, which is designed to enable
consumers to find pay TV content that can run on their TVs and mobile devices.
When news of
the deal broke this month, some analysts saw it as an opportunity for Cisco to
sell its low-profit set-top box unit, a commodity business that they said
seemed to conflict with Ciscos approach of using innovation as a way of
separating itself from competitors.
There's not
really a lot of differentiation [in set-top boxes], Zeus Kerravala, principal
analyst with ZK Research, told
eWEEK
at the time.
Others have
echoed such sentiments. However, after the NDS deal was announced, Chambers
said the set-top box business was important to Ciscos overall video strategy,
and appeared to reiterate that during his discussion with the
Journal-Constitution.
Ciscos core
networking business still makes the most money for the company. Switches
generated $3.6 billion in sales during the last financial quarter, while routers
garnered more than $2 billion. However, revenues for both in the relatively
mature networking market grew 8 percent, compared with the 23 percent increase
in service provider video and 10 percent in collaboration, which also includes
video.
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