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Cisco Grabs Phys Sec Acquistion #2 – Broadware

It’s About Time!

Cisco_logo
When Cisco purchased SyPixx a year ago and fulfilled the
prophecy I had made a year earlier, many industry pros wondered why it wasn’t
Broadware.  Cisco and Broadware had a
relationship, and Broadware was clearly a market force in video surveillance.  So if Cisco wanted to make an entrée to the
video surveillance stage, why not Broadware?  SyPixx, after all, was designed for small
scale deployments. It’s a lovely
product, but it is meant for managing the cameras locally at a single site —
not many campuses over a wide area network like Broadware.

SyPixx was Cisco’s toe in the water. The SyPixx solution was
suitable for the Cisco channel to sell to casinos, but did not afford Cisco the
opportunity to tackle bigger projects. Broadware on the other hand has
relationships and success in government projects, with integrators like
Lockheed and Northrup, and in very large deployments. That appeals to Cisco
which now understands that its foray into physical security will have to generate
more revue and solve bigger problems.

Wouldn’t VidSys plus Steelbox have been better?

Revenue is king, and let’s face it, Broadware had customers
and revenue far in excess of Steelbox and VidSys combined.  More customers means more upsell
opportunities. More revenue means more
EBITDA impact on Cisco’s numbers.  In
addition, Cisco gets a hard on for central server based solutions like
Broadware.  All video traffic is
controlled by a video server which directs traffic and balances loads.  Hmmm, sounds a lot like a Cisco router. Cisco has gotta love the prospect of selling racks
of servers and transcoders.

That’s all great for a customer with a bottomless pit of
cash to spend on deployments.  For my
money, I’d take VidSys plus Steelbox any day. VidSys can manage inputs from any video source, while Steelbox has the
most efficient video routing and storage appliance on the market.

SyPixx Left Behind?

SyPixx is still the hardware front end to Cisco’s video
surveillance story.  All Cisco video
deployments will be a mix of SyPixx, Broadware, and miscellaneous other Cisco
pieces.

Thumbs Up

All in all, Broadware is a good fit for Cisco – and Cisco
really needed this acquisition to keep up the momentum.

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  1. May 22, 2007 at 8:50 am

    Steve, do you have any financial details on the Broadware acquisition? Cisco did not disclose terms, but have you heard anything? I’m just curious.

  2. Tim
    May 22, 2007 at 11:17 am

    This is consistent with Cisco’s strategy. At the end of the day, they need to sell routers… and Broadware takes an approach to video surveillance that requires putting an overwhelming amount of video on the IT backbone.
    That’s a recipe for more routers if I ever heard one.

  3. Frank Yeh
    May 24, 2007 at 10:09 am

    Steve,
    Been reading your excellent blog for a while now but this is my first post.
    To Tim… as far as Cisco’s overall strategy being about selling routers, that is not necessarily true.
    Cisco has identified a number of key high-growth markets that they have an entry to based on their dominant position in routing & switching. Their getting into these markets is not necessarily about driving more routing revenue, it is about moving into new markets driven by their strength in routing.
    You can’t drive double digit growth forever with your core business. This is why emerging technologies are interesting for Cisco.

  4. May 31, 2007 at 6:05 am

    Momentum?

  5. May 31, 2007 at 12:40 pm

    Ha! Momentum. OK, maybe that’s not the most applicable word. Maybe I should have said that cisco needs the acquisition to temporarily sidestep a catastrophic failure of its physical security program. 🙂

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