Cisco offered $3 bn for Tandberg today – and I think it’s a good deal for them. They bought:
- Tandberg’s full suite of video end points from the Movi desktop to the T3 telepresence studio – This is what got Tandberg to a leading market position and they are assets that Cisco can put continue to sell
- The promise of open interoperability and the Codian – Tandberg is seen as fully committed to open interoperability – a reputation that is enhanced by their Codian bridge products. These Codian bridges can enable Cisco open up interoperability
- A healthy run-rate business – with $808 Mn in 2008 revenues, and both profit margins and growth expected to be well over 20% there is more than enough money to keep th lights on and fund product development work
Integration of Tandberg will have challenges. Cisco has not been able to open their video systems up to enable easy interoperability to the market so there is clearly tough work to be done to bring this promise to fruition. In order to rationalize and advance the video business Cisco will need to enable work teams separated by 9 time zones to cooperate and work together. In anticipation of this, the combined entity plans to install a unified management team in Europe, where they will be able to rapidly put together strategies and plans.
The assets in Cisco’s control post acquisition would now have the ability to push the market through 2 transition points.
- Unified Conferencing Market Transition – Unified Conferencing is coming and it will require audio, video and web conferencing capabilities to be integrated and delivered to specialized meeting rooms (like telepresence studios) and horizontal work spaces (like PC desktops)
- B2B Video Conferencing – Cisco has already invested in network exchanges for telepresence and will undoubtedly extend this “as a Service” model to power conferencing growth – especially in the B2B market, essentially a green field market for video conference vendors.
What do you think of the offer? and when do you think these market trasitions will occur? Do you think a completed acquisition will hasten the development of a robust B2B Unified Conferencing market?