Cisco is beefing up its video conferencing arsenal, picking up Tandberg, a Norwegian video conferencing outfit, for $3 billion. In a statement, Cisco said it is acquiring Tandberg to expand its collaboration platform. With the deal, Cisco will bring in Tandberg's network infrastructure and video conferencing equipment (right).
The deal is expected to close in the first half of 2010 and boost Cisco's earnings in fiscal 2011. Tandberg's 1,500 employees will be part of Cisco.
So what's Cisco's plan? Tandberg's gear will be integrated in with Cisco's TelePresence portfolio. Meanwhile, Tandberg's endpoints will give Cisco more of an installed base to sell into. Tandberg's portfolio includes everything from desktop video conferencing systems to multiscreen telepresence systems. Simply put, Cisco is trying to take its telepresence act to multiple points.
Here's a brief look at Tandberg's porfolio:
Tandberg CEO Fredrik Halvorsen will lead Cisco's TelePresence Technology Group. He will report to Marthin De Beer, senior vice president of Cisco's emerging technologies group.
In a research note, Cowen analyst John Marchetti said:
We note with Tandberg's broad installed base, Cisco now has the ability to more aggressively push a full portfolio of collaboration and video networking solutions to a much wider customer base and we expect the company to aggressively target the mainstream enterprise video conferencing market with the Tandberg product set, a market that Tandberg enjoys leadership in today along with Polycom. The only overlap between the two companies from product perspective is at the high-end Telepresence level where we expect some product rationalization is likely to occur, with Cisco maintaining its Telepresence solution and making it interoperable with the full suite of Tandberg conferencing products.