Cisco plans $5 billion NDS Group buy to expand in emerging markets

Cisco has announced that it plans to acquire NDS Group for $5 billion, which provides video software and content security to service providers and media companies. If all goes to plan, NDS will join a long line of Cisco acquisitions key to what it calls its “build, buy, and partner” strategy.

NDS, claims Cisco, will boost Cisco’s delivery of Videoscape, a platform which allows partner companies to provide media entertainment to customers. Videoscape makes use of cloud technology to help the company deliver rich media across mobile and social platforms – crucially, Cisco says, by “protecting and enhancing thevalue of content for service providers and media companies.” It will also give Cisco a leg-up into highly important emerging economies like China and India, where NDS has already been busy securing sales.

Cisco’s purchase, expected to close during the second half of this year, must face the usual regulatory reviews both in the US and elsewhere. NDS will continue to operate as a separate company outside of Cisco until the transaction is complete, at which point 5,000 employees will find themselves part of Cisco’s Service Provider Video Technology Group. NDS executive chairman, Dr Abe Peled, will become SVP and chief strategist for Cisco’s Video & Collaboration Group.

Peled, executive chairman, NDS, said the two companies are “helping drive the transition that will enable service providers and media companies to offer new revenue-generating video experiences.” Peled believes NDS’s open software video platform, and the services it offers, are “highly complementary” to Cisco’s technology. NDS’s strategy, following the acquisition, will focus on working with set-top box manufacturers and expanding on making more hardware available for service providers.

John Chambers, Chairman at Cisco, said in a statement that the purchase fits in with his company’s broader strategy to capture market transitions. The buy will enable content and service providers to offer video using the cloud, thereby driving “new monetisation opportunities and service differentiation.”