Thursday, August 26, 2010, 11:27 AM ET|Posted by Will RichmondThis morning Cisco announced it intends to acquire ExtendMedia, whose OpenCASE software is used by multiple pay-TV operators and content providers for video content management and three screen delivery. I've been following Extend for years, and it was a portfolio company of Atlas Venture, where my former consulting partner Ahmet Ozalp (who's now the CEO of Telenity, a mobile services provider) led its investment. For more on Extend, see this VideoNuze interview with Extend's CEO Tom MacIsaac, who was brought in 18 months ago and was previously CEO of Lightningcast, an early online video ad network that was acquired by AOL.
This morning I asked Kip Compton, Cisco's GM, Video and Content Platform about the deal and its implications, and Extend's founder Keith Kocho what it means for the company. Following is an edited transcript.
VideoNuze: Why is Cisco acquiring ExtendMedia?
Kip Compton: We're seeing a market transition to IP video with our service provider customers which is driven by their desire to reach consumers on all different devices and wherever consumers are. We believe Extend's technology and team are one of the leaders in the industry and will fit well with our efforts to deliver IP architectures to our customers.
VN: How does Extend fit in with and benefit from other Cisco assets?
KC: Extend will become part of our Service Provider Video Technology Group. We're really excited about the opportunity to deliver more integrated solutions to our customers and we think there are synergies between Extend and our existing CDS, set-top box and networking business.
VN: There's been talk of incumbent pay-TV providers going out of footprint to address the market with purely IP-based solutions. Does Cisco see this happening, and is the Extend deal aimed at helping this happen?
KC: We think there are 2 different transitions happening and we think it's useful to separate them. First, we think there's an architectural shift to IP video happening as I said before, and we think the capabilities that Extend brings are key to enabling that. The transition to IP enables new business models, but that's a separate consideration for our customers. What we're seeing is that new IP architecture is attractive for them in their existing business models, as well as giving them options on future business models they may or may not pursue.
VN: There is no end to the innovation in both technology and business models for broadband-delivered video. Can you say more about how Cisco sees the market shaping up in the next couple of years?
KC: If you ask 5 Cisco people you'd probably get 6 opinions on that because it's a time of great uncertainty, but we do see a technical and architectural shift happening, and we also see an opportunity for service providers to win, contrary to some of the things out there. We see the service providers as best positioned to bring together professional content that the mass market consumer demands, with the Internet experiences that are increasingly important, into a cohesive bundled offering that consumers can access across devices.
VN: One of Extend's key competitors is thePlatform, which is owned by Comcast, which is a key Cisco customer. Is there a risk of alienating Comcast with the Extend deal?
KC: Comcast is the only one who can answer that question definitively, but our perspective is that we have a very broad and positive relationship with Comcast across many projects over the years, so we don't believe this will be a major factor between Cisco and Comcast. We continue to see opportunities for mutual collaboration. In addition, we're an open systems company so companies that want to work with thePlatform we'll absolutely support and those that want to work with Extend we'll obviously support as well.
VN: Keith, can you say more about what the deal means from Extend's standpoint?
Keith Kocho: It's clear that the moves we're seeing in the industry represents huge opportunities for all of us. We're thrilled about this deal, particularly because it allows us to expand our footprint internationally. We've also been seeing our customers increasingly using our technology more in the core of their operations, which suggests a growing sense of maturity in the industry.
VN: Congrats again guys.