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Tuesday, August 22, 2006

Cisco Buys Arroyo: "We Will Control All You See and Hear"

Cisco Systems (CSCO) is striking again on another deal. The deal is a paltry $92 million acquisition, but it is yet another example of how Cisco is slowly starting to own and control (or at least be able to offer) technology solutions for literally every single aspect of communications in between the cords and cables leaving Internet servers all the way up to the cords and cables that connect to your computer (or any web connection device).

Cisco Systems announced an agreement to acquire privately-held Arroyo Video Solutions, Inc. for approximately $92 million in cash. Arroyo is a provider of next-generation technology solutions for on-demand television and related consumer services.

The Arroyo solution is designed to deliver exceptional scalability, service availability and operational simplicity -- offering a highly extensible platform for video-on-demand today and emerging time-shifted services in the future. The integration of the Arroyo platform into the Cisco IP Next Generation Network architectural framework will help enable carriers to accelerate the creation and distribution of network delivered entertainment, interactive media and advertising services across the growing portfolio of televisions, personal computers, mobile handsets and emerging media capable devices in our increasingly connected lives.

"The entertainment industry is going through a major shift while consumer desire for personalized on-demand service is on the rise. The industry is quickly evolving from pure video-on demand to anything-on-demand with any content delivered to any end device. Cisco's next generation network strategy offers service providers the ability to make this vision a reality," said Michelangelo A. Volpi, Cisco senior vice president and general manager, routing and service provider technology group. "With the addition of Arroyo's innovative software, which offers flexibility in content delivery, service providers will be in a position to serve content how, when and where consumers want it."

Joining Cisco from Arroyo will be an exceptional team of technical industry leaders. This team includes Drew Major, an original founder of Novell and industry icon recognized for his expertise in network operating systems, distributed systems and content delivery networking (CDN). Also joining is Paul Sherer, former chief technology officer at 3Com and key contributor to a broad portfolio of networking patents and technologies. Arroyo was founded in 2002 and has 44 employees based in California and Utah. This will become under the Cisco Cable & Video Initiatives Group, within the Service Provider organization led by Volpi.

Jon C. Ogg
August 22, 2006
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