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Cisco's service provider video unit sold back to private equity firm

Cisco is shedding its service provider video software business in order to concentrate resources on its core businesses.
Written by Natalie Gagliordi, Contributor

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Cisco said on Tuesday that it's shedding its service provider video software unit in order to concentrate resources on its core businesses.

The deal has private equity firm Permira essentially buying back the video software business that it sold to Cisco in 2012 for $5 billion. Permira plans to rebrand the business and run it as a standalone company once more.

Meanwhile, Cisco will hold on to the video and media technology related to its core business in networking, multi-cloud, security, data, and collaboration.

When Cisco bought the business six years ago it was called NDS Group Ltd., and its software for paid-television channels was used by broadcasters worldwide. Cisco intended to use NDS' technology to speed up development and delivery of its Videoscape platform aimed at on-demand video for mobile devices and tablets.

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But Cisco's service provider video unit has seen declining revenue since 2014, as traditional pay-TV services that run through cable and satellite boxes struggle to compete with streaming offerings from the likes of Netflix, Amazon, and Hulu.

Financial terms of the deal were not released, but several media outlets list the price tag as $1 billion, meaning Cisco is taking a major loss to offload the business.

Meanwhile, Cisco CEO Chuck Robbins said he's proud of the innovation and customer momentum the business has built up during its time with Cisco.

Robbins stated, "The new company is well-positioned to drive this work forward and continue to deliver the solutions that meet the current and future needs of service provider video customers."

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