Cisco ups telepresence ante with Tandberg buy

Cisco is making major investments in telepresence technologies

Cisco has announced its intention to buy Norwegian telepresence specialists Tandberg for $3bn (£1.87bn).

The networking giant intends to close the deal early next year, and said that the acquisition will boost its collaboration portfolio, particularly in the area of videoconferencing.

"Cisco and Tandberg have remarkably similar cultures, and a shared vision to change the way the world works through collaboration and video communications technologies," said Cisco chairman and chief executive John Chambers.

"Collaboration is a $34bn [£21bn] market and is growing rapidly, enabled by networked Web 2.0 technologies. This acquisition showcases Cisco's financial strength and ability to quickly capture key market transitions for growth."

Cisco said that the addition of Tandberg's videoconferencing systems, which include endpoints and network infrastructure, will allow for improved interoperability, while aiding competitors as it "accelerates customer interest in video communication".

Jeffrey Mann, research vice president at Gartner, argued that the acquisition will certainly strengthen Cisco's portfolio, but still leaves room for improvement.

"This move deepens Cisco's capabilities in video, an area where it is already active. It fills in the midrange of their offering, between webcams and telepresence, where Cisco had offerings. Tandberg adds the midrange conference room capabilities," he said.

"This still leaves a hole in Cisco's collaboration offering, namely in the area of wikis, document management and team workspaces. Cisco has been trying to redefine collaboration to mean 'videoconferencing', which this move reinforces. For most of us, text-based exchanges form the largest part of the collaboration we do every day. Cisco needs to make moves here as well."

Steve Leyland, EMEA managing director at unified communications firm Polycom, said in a statement: "Today's 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."

Tandberg chief executive Fredrik Halvorsen will lead the new TelePresence Technology Group at Cisco, reporting to Marthin De Beer, senior vice president of Cisco's Emerging Technologies Group.

"Cisco and Tandberg share a vision of changing the way people communicate and collaborate. This transaction is a vote of confidence, not just in Tandberg but in our technology and our people," said Halvorsen.

"The combination of world-class technologies, Cisco's global scale, and exceptional people from both organisations will enable us to accelerate innovation and market adoption."