August 26, 2010

Cisco's Acquisition of ExtendMedia May Help its Networking Business

Cisco intends to acquire privately-held ExtendMedia, a provider of software-based Content Management Systems (CMS) that manage the entire lifecycle of IP video content. ExtendMedia is based in Newton, Mass., with the majority of its employee base in Toronto, Canada.

As the video market transitions to multiple-device delivery, vendors are looking for ways to participate in the transition to IP video.

"ExtendMedia will strengthen Cisco's position in the delivery of IP video services by enabling service providers to provide a more interactive and personal experience and to optimize quality for consumer viewing devices," said Enrique Rodriguez, SVP and general manager, Cisco's Service Provider Video Technology Group, in a statement.

A lot of companies participating in the CMS space are focused on working with programmers directly, said Kip Compton, general manager of the Video and Content Platforms business for Cisco’s Service Provider Video Technology Group.

"Extend is focused on working with service providers," said Compton. "Extend's Tier 1 customers include AT&T and Bell Canada."

But thePlatform, a Comcast subsidiary, operates in this same space, offering CMS services to many cable providers, including Comcast, Time Warner Cable, Cablevision, Cox and Rogers.


An official statement from thePlatform said: "thePlatform has consistently predicted further consolidation in the white-label OVP (online video platform) space, and today's acquisition of ExtendMedia by Cisco is simply part of this trend. Cisco continues to be one of the many CDN (content delivery network) partners that works with thePlatform to serve the market, and that should not change because of today's news."

For Cisco, the ExtendMedia acquisition will give it a CMS play in addition to its existing CDN business, which it calls Cisco CDS (Content Delivery System).

"Extend has all the metadata, and that kind of information could be very useful to our networking products," said Compton. "Data can manage networking products more efficiently. It can also help with our set-top box business. We're looking to deliver an integrated experience, and having access to different metadata can enhance that experience."

Financial terms of the transaction are undisclosed. The acquisition is subject to various standard closing conditions and is expected to be complete in the first half of Cisco's fiscal year 2011. Upon the close of the acquisition, the majority of the ExtendMedia team will be integrated into Cisco's Service Provider Video Technology Group. The ExtendMedia Sales and Professional Services teams will integrate into the Cisco Sales and Advanced Services organizations.

-Linda Hardesty