In a bold move, networking giant Cisco Systems announced an agreement to acquire Scientific-Atlanta Inc. for $6.9 billion in cash. After the deal closes, S-A will become a division of Cisco's Routing and Service Provider Technology Group. S-A's chief Jim McDonald will report to Cisco Senior Vice President Mike Volpi.
So, what does Cisco get from the deal? In short, an unmatched solution portfolio for service providers targeting the broadband triple-play of video, voice and data. S-A is the number-two supplier of digital cable set-top boxes, as well as video distribution network infrastructure.
The combination will also help the team gain traction at complementary customer accounts. Comcast is a major Cisco customer for IP infrastructure, but on the video side, has historically favored Motorola over S-A. Could this change as a result? Scientific-Atlanta has been tapped by SBC as a key vendor for its IPTV rollout. Can that relationship finally help Cisco gain significant traction with the Bells? And then there is Linkys, Cisco's consumer networking product arm. Undoubtedly, there will be a push for Linksys-branded set-top boxes and networked entertainment centers at retail.
This deal rocks the cable industry vendor landscape. More to come.