Cisco is looking to sell its video software business as part of a move to focus on the network infrastructure business, according to a Bloomberg report.
According to Bloomberg, citing unnamed sources, Cisco is soliciting offers for NDS Group, which it acquired for US$5 billion (€4.3 billion) five years ago, as it refocuses its activities on growth areas under new CEO Chuck Robbins.
NDS is part of Cisco’s service provider video division, which has posted falling revenue for the past few years. Cisco sold its set-top box and consumer hardware division, based on its earlier acquisition of Scientific-Atlanta, to Technicolor in 2015 for €560 million in cash and stock. Cisco originally bought that unit for US$6.9 billion in 2005.
While potentially exiting the traditional video business completely with the sale of NDS, Cisco has nevertheless been on an acquisition spree of late, most recently agreeing the US$1.9 billion acquisition of cloud technology company Broadsoft. This was seen as a move that would help develop its enterprise collaboration business, one of the potential growth areas Cisco is seeking to foster as its traditional core business – the sale of routers and switchers – faces long-term decline. Existing growth areas for the company include its wireless and security lines.
Service provider video, on the other hand, is seen by Cisco as a declining business, as it supplies traditional pay TV operators that deliver video over managed networks. The pay TV business currently faces serious challenges – most recently highlighted by key NDS customer DirecTV’s loss of subscribers as cord-cutting gathers pace in the US – along with a move away from proprietary hardware solutions towards software and cloud-based delivery of video.