Cisco Systems Inc. (Nasdaq: CSCO) is solidifying vendor partnerships for its end-to-end IPTV distribution system, and sources say the Siemens AG (NYSE: SI; Frankfurt: SIE) / Myrio Corp. IPTV middleware platform might be its centerpiece. (See IPTV MiddleWARs: Far From Over.)

Light Reading first learned of Cisco's partnerships from vendor sources at the Telco TV conference in Dallas early this month. Word was that Cisco was ready to make an announcement at the time, but was prevented from doing so by last-minute squabbling over the agreement with Myrio.

A Cisco partnership with Siemens/Myrio could have major implications for the IPTV equipment market. Cisco would, in effect, be facing off against IPTV powerhouses Alcatel (NYSE: ALA; Paris: CGEP:PA) and Microsoft Corp. (Nasdaq: MSFT). IPTV infrastructure may finally become a two-horse race.

It wouldn't be the first time Cisco had aligned itself with Siemens when conditions were right. Light Reading reported Sept. 29 that the two have formed a consortium to respond to a large Orange (NYSE: FTE) RFQ (request for quotation) for IP Multimedia Subsystem (IMS) systems covering the carrier's fixed and mobile operations. (See Vendors Unite for IMS Pitch.)

Like Alcatel, Cisco would like to foster network hardware sales by pushing a compelling IPTV distribution solution to telcos. Cisco has been working on its IPTV story for some time, but the naming of its ecosystem vendors shows that it is rapidly getting its IPTV house in order. (See Alcatel Preps New Tech Roadmap.)

Besides Myrio, our sources say, Cisco's partner lineup would include Integra5 for client-side middleware, NDS Ltd. for conditional access and content protection, BroadHop Inc. for provisioning and subscriber management, and SES Americom for satellite transport. (See Integra5: Part of Cisco's IPTV Vision?)

Cisco has already acquired some of the other necessary pieces of its IPTV solution. It acquired Scientific Atlanta , which provides the video encoding and set-top box technology. It acquired KiSS, which provides networked digital video recording (nDVR) technology. More recently, it acquired Arroyo Networks, which provides VOD software. Cisco made another move toward the IPTV market by investing in the DRM and conditional access company Widevine Technologies Inc. in April. (See Scientific-Atlanta: Cisco's Sweet Deal?, Cisco KiSSes Up to Telco TV, Cisco Snatches VOD Vendor Arroyo, and Cisco Fertilizes Widevine.)

But in order for Cisco to make a game-changing entrance in the IPTV market it may need a strong middleware piece to pull all the parts together. Sources say Myrio trails only Microsoft TV in terms of deployment numbers to date.

Harmonic Inc. (Nasdaq: HLIT) VP of solutions and strategy Nimrod Ben-Natan says the addition of Myrio might have a cumulative positive effect on the entire Cisco video distribution system. "When you try to connect three pieces that are not as strong without the glue, which is the middleware in my mind, then you have a problem," says Ben-Natan.

Myrio and Cisco naturally aren't saying much about an impending partnership. "We do quite a bit of work with Cisco; we are generally quite aligned on a number of things," says Myrio CEO Chris Coles. Myrio has worked with Cisco to make its middleware integrate smoothly with Cisco/Scientific-Atlanta set-top boxes. But Siemens declines to say whether it has been in discussions with Cisco about a place in Cisco's IPTV ecosystem.

"Middleware is a critical piece of the IPTV delivery system, and provides a core foundational element for the consumer’s television experience," Cisco spokesman Wilson Craig writes in an email response to Light Reading. "As such, we've partnered with several key middleware providers to deliver IPTV platform solutions to customers."

Some of Cisco's other potential IPTV partners provided a little more insight. "Cisco pushing an IPTV story and is well positioned to grow into this part of the business," says BroadHop VP of solutions Kishen Mangat. Mangat says his company is part of Cisco's IPTV story. "We are the subscriber management layer between the network and the customer back end; we push policies down onto the middleware." Mangat says his company has been working with Cisco since 2005 and has landed 25 customers through the partnership.

NDS VP of market development Ian Tapp says his company has been working to integrate its digital rights management (DRM) system with Cisco's Scientific-Atlanta set top boxes, but couldn't comment on an alleged partnership arrangement with Cisco proper.

Integra5 also declined comment.

— Mark Sullivan, Reporter, Light Reading