Aggressive Moves

Cisco’s acquisition of Tandberg is a strategic one given the

wide ranging business benefits it will accrue out of it. The $3 billion

acquisition will further propel Cisco’s stature in the

Unified Communications space. The key area in which Cisco will gain a

lot from Tandberg is access to its mainstream video conferencing

technologies. Cisco’s telepresence despite being the best in

class immersive video conferencing technology has remained niche due to

high up front investments.



With recession, many companies had cut down their long distance travel.
But at the same time the recession also made many companies not to go

for big time large investment IT solutions. And that in a way

prohibited video conferencing solutions like telepresence in going main

stream last year. In addition, there are lot of compatibility issues

involved in video conferencing in terms of device, software and the

type of connectivity used. Here the biggest asset Cisco gains out of






Tandberg comes from its range of specialized software that makes for
managing heterogeneous systems efficiently. Tandberg’s video

conferencing solutions are more flexible and even compatible with

desktop PC while Cisco’s telepresence require a whole lot of

proprietary gear like unique display units, cameras and even tables and

chair. So it’s kind of bouquet solution that make sense for

very large enterprises with very big travel budgets. Those companies

which had frequent ‘business class fliers’ derived

more RoI by adopting telepresence.






With recession nudging even large companies to look at TCO and RoI more
closely made telepresence very niche and here is where the acquisition

is going to help Cisco and it will make it become more diverse and an

end to end unified communication vendor cutting across business

segments of varying sizes. With Tandberg having several low cost

solutions under its belt will enable Cisco to tap into the mid-sized

clients and it will further add more value to Tandberg solutions by

using its proven expertise on video conferencing. So going forward

Cisco might refine the solution and may even come with no frills

telepresence platform more suited for the SMBs using

Tandberg’s low cost technologies.






Cisco over the last few years has been on an inorganic spree. In the
last five years alone it had bought close to 40 companies. The major

ones were- Scientific Atlanta for $ 6.9 billion and WebEx for 2.9

billion. Even it acquired a Flip Video camera maker Pure Digital for $

590 million. So clearly Cisco is going on a path that it will become a

market leader in the unified communications market globally in the days

ahead.