Cisco announces a $3bn bid for Tandberg

AUTHOR: Inavate

Network equipment giant Cisco Systems has reportedly done a $3 Billion deal to buy videoconferencing firm Tandberg.

The move marks a bid to dominate the corporate video communications market, with analysts expecting it to considerably ratchet up competition in the space. They also expect it to prompt further moves between other players in the market.

The acquisition also helps Cisco fill out its range of products, by plugging the gap between its top-end Telepresence packages and the software based desktop package WebEx. The former costs around a quarter of a million dollars.

Other major players in the VC market reacted to the deal within hours. Lifesize issued a statement from its CEO Craig Malloy, which seemed to suggest that Cisco was investing in outdated technology. “After nearly 20 years of building businesses in this industry, it’s clear that customers expect video communications to become an accessible, everyday communications tool for all individuals across the organisation, not just a very expensive board-room application. The future of the industry – and what LifeSize is delivering – is solutions that deliver the telepresence experience to anyone, everywhere. It is a bit surprising that Cisco would invest where video communications has been versus where the industry is going.”

Polycom also reacted. “The news reinforces the growing interest in visual communication as a mission-critical business tool. As the leader in the industry and the largest collaboration solution provider, Polycom remains focused on delivering the best possible solutions and service to our customers and helping them address real-world challenges such as an uncertain economy, reduced travel budgets, globalisation, increasingly dispersed and mobile workforces, and the need to reduce carbon emissions,” said Steve Leyland, Polycom Managing Director for Europe.