Cisco adds to online video arsenal

Cisco Systems is to add another weapon to its online video arsenal with the purchase of Arroyo Video Solutions, a company that makes software to help manage video-on-demand services.

The deal, worth $92m in cash, marks the latest in a string of investments by the world’s biggest maker of networking equipment, which is attempting to cement its position at the forefront of efforts to bring video, internet, and telephone services together in the digital home.

Mike Volpi, head of Cisco’s router and service provider technology group, said the acquisition would allow Cisco to capitalise on a “major shift” in customer preferences towards on-demand services that allow viewers to access content at a time and place of their choosing.

While Arroyo is best known for its video services, a spokesman said its software could be used to produce audio and other on-demand data services as well.

“The industry is quickly evolving from pure video on demand to anything on demand with any content delivered to any device,” said Mr Volpi, adding that Arroyo would allow service prodicers to “Serve content how, when and where consumers want it.”

Cisco said Arroyo would add to the plaform established with the $6.9bn acquisition last year of Scientific Atlanta, a maker of set-top cable television boxes.

Other recent investments include KiSS Technology, a Danish maker of networked DVD players and other electronic devices that Cisco bought in September 2005; Akimbo, a video content startup; and Moviebeam, an on-demand video rental service.

Because of its heavy bandwidth and storage requirements, video has long been viewed as the key stumbling block to efforts to bring video, voice, and data together into a single internet-based service. Cisco hopes to play a central role in the evolution of that market by offering services that help move content over computer networks throughout its life cycle - from the time it is created to the time it is viewed in the home.