Cisco's move to streamline its operations hasn't kept the company from making new acquisitions. Cisco plans to acquire BNI Video for $99 million.
A privately held company in Boxborough, Mass., BNI Video supplies service providers with two video products that offer video back-office and content delivery network, or CDN, analytic capabilities.
Cisco is looking to BNI's technology to beef up its Videoscape TV platform. Videoscape lets service providers deliver video to any device over any Internet Protocol network. Cisco said BNI Video's technology would also help its service provider customers reduce operational costs and complexity and expand opportunities to monetize content.
"Cisco is committed to working with our service provider customers to deliver next-generation IP-based video experiences across devices," said Marthin De Beer, senior vice president and general manager of Cisco's Emerging Business Group. The BNI Video acquisition is part of that commitment by giving customers migration path to the Videoscape platform.
Cable Industry Encouraged
BNI Video has an industry background that may have attracted Cisco to become more than an investor. Along with Cisco, Comcast and Time Warner Cable were early investors in BNI Video.
Tony Werner, chief technology officer for Comcast, said BNI's technology has the potential to "play a critical role in advancing video experiences for Comcast's customers," and is encouraged by Cisco's acquisition of the company.
Likewise, Mike LaJoie, chief technology officer at Time Warner Cable, said the companies joining forces is an opportunity to "take video service providers to the next level with Internet video, helping to manage networks more efficiently to deliver advanced TV entertainment experiences to consumers."
With the BNI Video acquisition that was announced Thursday, Cisco is putting its money where its mouth is. Cisco has stated that video is one of its five company priorities, the biggest growth driver for IP traffic and, as a result, the company's core networking business. The BNI Video acquisition follows the recent acquisitions of ExtendMedia and Inlet Technologies, which also strengthen Cisco's Videoscape portfolio.
"Cisco believes, like many do, that the amount of video is only going to increase. It's already half of Internet traffic and I'm expecting it to be upward of 90 percent in the next five years," said Zeus Kerravala, principal analyst at ZK Research. "In order for ISPs to be able to control video quality and monetize it, these technologies are important."
Kerravala also noted Cisco's recent acquisition trends. He expects the firm to return to doing smaller deals, below $150 million, until it gets the repatriation rates it needs.
"Most of Cisco's cash is tied up overseas, so people are trying to guess at what the next acquisition might be," Kerravala said. "It's going to continue to be companies like this that are very specialized, and do one thing well in one of Cisco's core areas. This is becoming the norm for Cisco acquisitions."