At the annual C-Scape, Cisco's John Chambers, the visionary for the company, makes almost a cavalier comment about how Cisco would be focusing on video as "the new killer application." It is apparent that Cisco is turning vision into action:
Step 1- In November of 2005 Cisco buys Scientific Atlanta for $6.9B, providing infrastructure and equipment including components for MPEG encoding and decoding digital content.
Step 2- Cisco's Scientific Atlanta division allies with a company that has caused more problems for advertisers than the Internet, TiVo. TiVo began the digital video recorder and non-linear consumption of TV trends for mass market applications. The combination of Scientific Atlanta technology and market girth and the user friendly TiVo Graphical User Interface provides software and usability expertise.
Step 3-Cisco buys a little company back in December of 2006 called Tivella a 10 person company that develops software for Digital signage providing Cisco with the execution expertise in digital signage.
Step 4- In May 2007, Cisco buys Broadware, which enables IP Video surveillance monitoring, management and storage. This supplements their earlier purchase of Sypixx, which provides products to bridge and manage analog surveillance equipment in an IP network.
Step 5-Cisco announces on September 18th 2007 that it has purchased Cognio, a company that better manages wireless spectrum. The acquisition provides Cisco with the ability to better manage wireless spectrum, enhance their QOS, secure application delivery and allows them to deliver a rich, dependable end-user mobility experience.
Individually, the steps are notable, but not dramatic. However, combined, the acquisitions provide Cisco with a launching pad to dominate a variety of next generations IP video applications.
Dividends of Cisco's Strategy in Next Generation Applications
Scientific Atlanta brings value instant value, but provides greater promise for interactive advertising. When Internet protocol is enabled on set top boxes, Cisco has an ability to leverage its enterprise expertise to create a two-way marketing and sales engine directly in the living room, with the TiVo GUI as a friendly powerful interface.
Cisco has also unveiled another dividend of its enterprise video strategy with its entry into IP Video Surveillance. Not only are video surveillance systems pervasive across enterprise, government and other commercial entities, but the market is at the early stage of a massive transition from analog CCTV systems, to networked IP-based solutions. The transition promises to drive demand for network switching gear, storage, cameras, and a variety of software-based application packages. In addition, it puts high-bandwidth, mission-critical digital video onto the enterprise network: A wedge in the door for further enterprise-based video applications.
Finally, Cisco issues a release that Digital Signage is an emerging technology that has the potential to transform the customer experience and to promote richer communication, a visionary view. In January of 2007, Cisco has a group focused on Networked Digital Signage. One of the results is a partnership with NEC and Cisco, earlier this year to offer networked digital signage. Trials are being conducted at select Hyatt hotels for use during big events, like trade shows and large gatherings. The system promises to better serve and manage attendees through networked digital signage outfitted with RFID semiconductor chips containing a host of information: Attendee stats, name, company, etc. An event holder can better determine attendance at various breakout sessions, better direct people with the displays. IP video surveillance adds enhanced levels of security and additional video content analytics possibilities. With wireless spectrum control, quality of service is improved, and accuracy to insure attendees receive critical data if and when needed
When one considers Cisco's acquisition strategy with its core competence in enterprise networks, it is clear why Cisco purchased Cognio: a position in IP set-top boxes, IP Video surveillance, IP Digital Signage Software/Hardware and now Spectrum management. The plan is clear. If Cisco can manage and execute, they will drive new markets to feed their growth and drive the shift of video onto the IP networks.
Cisco's Strategy Is Not Without Hurdles
Cisco faces challenges in the form of "mind share." Cisco is not known to these markets currently. Cisco has a lot of market and business development in front of it. The new customers need to be educated. Bottom line, for Cisco to truly capture new markets, it needs a make over. Cisco is still ramping up their campaigns to reach out and develop new markets and customers that have no idea who they really are and what they can bring.
This MultiMedia Intelligence Brief is based on recent research, "Advertising & Technology Collide: Semiconductor Companies, Technology Providers, Media Companies and Ad Agencies Partner to Move from Disruption to Monetization," (MMI070301DA). The research examines the impact of new technologies on the advertising industry. It first examines why current advertising is becoming less effective and the critical role of the DVR. It then addresses the resulting impact on the "upfronts" and the impact on ratings providers, such as Nielsen. Digital technologies, platforms and the impact on advertising will subsequently be examined. This includes such platforms as set-top boxes, PCs, game consoles, DVRs and portable devices. It will finish by discussing new and creative ways that advertisers can utilize core technologies and examining some of the new digital advertising opportunities, including Internet advertising, IPTV advertising, Internet TV, mobile TV advertising, and in-game advertising.
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Title: Advertising & Technology Collide: Semiconductor Companies, Technology Providers, Media Companies and Ad Agencies Partner to Move from Disruption to Monetization
Published Date: September 2007
Author: Rick Sizemore
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