Cisco Snatches VOD Vendor Arroyo
The move, forecast in a July 13 Cable Digital News story on the on-demand market, will give Cisco a small but well respected VOD software startup to fill one of the last gaps in its digital video lineup for both cable operators and phone companies. That will allow it to compete better against Motorola, which filled a similar gap last month by snagging the somewhat larger Broadbus Technologies Inc. for a reported $186 million in cash.
Based in Pleasanton, Calif., no more than 25 miles from Cisco's headquarters in San Jose, Arroyo is mainly a software company that takes off-the-shelf hardware from IBM for its VOD servers and then adds its customized software solution. But, like Broadbus, it's considered a hot startup and counts Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Charter Communications Inc. as MSO customers. Launched in 2002, the privately owned company has raised more than $25 million in two rounds of venture capital funding from investors including Time Warner Investments and Comcast Interactive Capital .
Cisco officials, who have been scouring the hotly contested on-demand server market for months, say they took the step partly because they see the VOD business starting to take off as both cable operators and phone companies seek a competitive edge in the digital video business. Cisco executives say they also took the step in response to strong demand from both cable and telco equipment customers, which include such top MSOs as Comcast and Time Warner.
"It's a nice adjacent fit for the rest of our products," says Kip Compton, senior director of video and IPTV development for Cisco. "The technology is actually suited for both markets."
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— Alan Breznick, Site Editor, Cable Digital News