Cisco Systems has closed the sale of its video software business to Permira Funds, spawning Synamedia, a newly formed company that will focus on service providers as they formulate their next-gen, multiscreen video strategies.
The close arrives about six months after Cisco Systems Inc. (Nasdaq: CSCO) announced the sale of its Service Provider Video Software Solutions (SPVSS) to Permira , a private equity firm that has linkages to the NDS video software and security business that Cisco acquired in 2012 for a cool $5 billion. (See Cisco Dumps Video Software Biz, Ends NDS Era and Bye Bye Cisco Video Software, Hello Synamedia.)
While Synamedia , which declared itself "open for business" on Monday, is a new, independent company, it is also entering the fray with some of the old guard from the NDS days. Dr. Abe Peled, Synamedia's chairman, is the former chairman and CEO of NDS. Synamedia CEO Yves Padrines is likewise late of NDS, but has been serving as VP of Global Service Provider for Europe, Middle East and Africa at Cisco.
Synamedia has also added some new blood to the mix, announcing the hiring of Dave Longaker as SVP and GM of the Americas region. Longaker previously was chief revenue officer at TiVo Inc. (Nasdaq: TIVO)/Rovi, and spent about 15 years in sales exec roles at Alcatel-Lucent and Nortel Networks.
With the acquisition salted away, now comes the hard part -- making waves in a tough video software marketplace.
A major challenge ahead for Synamedia will be to retain its base of more than 200 pay-TV and media customers, a group that includes AT&T Inc. (NYSE: T), Comcast Corp. (Nasdaq: CMCSA, CMCSK), Sky , Cox Communications Inc. , Liberty Global Inc. (Nasdaq: LBTY), Rogers Communications Inc. (Toronto: RCI), Verizon Communications Inc. (NYSE: VZ) and Vodafone. It will also be seeking out opportunities for spurring growth and turning profits as service providers, including cable operators, continue to emphasize their higher-margin "connectivity" businesses and cast pay-TV into more of a supporting role as OTT-delivered video options become increasingly abundant. (See IBC2018: The Video Platform Profitability Conundrum and Video Playing 'Supporting Role' as Comcast Focuses on Connectivity .)
And those growth opportunities will become even more difficult to reel in given the consolidation of suppliers and other shifts occurring in the multiscreen video software landscape. First Synamedia will be contending with MediaKind (formerly Ericsson Media Solutions) and Comcast, which has had some success syndicating its X1 platform with major US and Canadian MSOs. But Synamedia will also be grappling with TiVo, MobiTV Inc. , Evolution Digital LLC and Espial Group Inc. in the small- and mid-sized end of the pay-TV service provider sector. (See Just Like Ericsson, Nokia Flogs Majority Stake in Its Video Biz, MobiTV Moves Needle With App-Based IPTV, Tivo Might Sell Off Its Products Business and Why Video Has the Urge to Merge .)
At IBC in September, Synamedia shed some light on its strategy, noting that it will help customers squeeze more out of their legacy infrastructure as they adopt new IP-based distribution models. It also touted plans for more investment in its Evo middleware platform and support for platforms such as Android TV and the Reference Design Kit, an open source software stack backed by a joint venture of Comcast, Liberty Global and Charter Communications Inc. (See Synamedia Reveals Strategy & Investment Focus.)
— Jeff Baumgartner, Senior Editor, Light Reading