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Cisco snags BNI Video for $99M

Thu, 10/20/2011 - 3:57pm
Mike Robuck

Cisco is forking out $99 million in cash and retention-based incentives in exchange for all of the shares of BNI Video in order to bolster its Videoscape TV platform.

Led by former Broadbus executive Conrad Clemson, BNI Video has made its mark with modular video back office and content delivery network (CDN) analytic capabilities, both of which are key enablers of delivering content to multiple devices in TV Everywhere services and for creating a migration path to Internet Protocol (IP) networks. (Clemson provides a detailed look at CDNs in an Open Mic column in the current edition of CED.)

BNI’s software serves a strategic role in video service providers’ (VSPs) video ecosystems by connecting content to subscribers, enabling transcoding and digital rights management, invoking quality of service to ensure the content produces the appropriate user experience, and interfacing with billing and entitlements so that the content is correctly monetized.

Cisco introduced its Videoscape concept at this year’s Consumer Electronics Show in Las Vegas. Videoscape is a TV platform for service providers that brings together digital TV and online content with social media and communications applications.

“Since we launched Videoscape in January, we’ve had a lot of customers embrace the vision and architecture we’ve articulated there, but they are also looking to us to help them with the transitional steps to migrate to that IP architecture,” said Kip Compton, vice president of strategy and product management for Cisco’s Service Provider Video Technology Group. “It’s obvious that the market transition is to IP video, and it’s something that will happen in stages over time. We were getting that feedback, and we were looking at what those next steps would be and what kind of technologies made the most sense. We very quickly zeroed in on BNI Video.

“The reason is because the technology that BNI has fills a couple of gaps in our portfolio, namely the video back office and the CDN analytics, but also because they build their products in a way that they are really platforms. Customers can use them today to solve compelling business problems, but because they are platforms, they are things they’ll keep in their networks. They will help them transition to Videoscape, as well as to an all-IP network. These are products that really straddle the current architectures and the Videoscape architecture and provide a path for our customers to migrate.”

Last year, BNI Video raised more than $16 million from investors that included Comcast Interactive Capital, Cisco, Time Warner Cable, and venture capital firms Charles River Ventures and Castile Ventures.

"Time Warner Cable invested early in BNI Video, as it brought a unique software platform to market that addresses the back office complexities of delivering TV Everywhere services," said Mike LaJoie, chief technology officer at Time Warner Cable. "Combining forces with Cisco presents an opportunity to take video service providers to the next level with Internet video, helping to manage networks more efficiently to deliver advanced TV entertainment experiences to consumers."

While BNI Video hasn’t announced any customers to date, Time Warner Cable could be using BNI Video’s modular platform to support its IP-based iPad app, while Comcast has started building its own CDNs.

"As a founding investor in BNI Video, Comcast Ventures recognized the potential for this technology to play a critical role in advancing video experiences for Comcast's customers," said Tony Werner, chief technology officer at Comcast. "With the combined expertise in IP video systems, Cisco and BNI Video offer service providers a compelling software and infrastructure platform to efficiently deliver video content to multiple devices."

BNI Video is the latest addition to Cisco’s Videoscape portfolio. In August, it purchased privately held ExtendMedia – for an undisclosed sum – with the intention of blending ExtendMedia’s TV Everywhere software-based content management system into its networking and video portfolios.

In February, Cisco paid $95 million for Inlet Technologies in order to add Inlet’s adaptive bit rate streaming capabilities to Videoscape.

“From BNI’s perspective, we’ve worked over the last couple of years with the Cisco integration team, the folks at ExtendMedia, and even some of the folks at Inlet,” said Clemson, BNI’s founder and CEO. “The architectures really fit well together. We’ve seen some great synergies between our team and those groups in the overall Videoscape umbrella.”

Headquartered in Boxborough, Mass., Cisco said BNI Video’s 72 employees will be integrated into its Service Provider Video Technology Group once the deal closes. Cisco expects the acquisition to be completed in the second quarter of its fiscal year, which runs from November through January.

Aside from the fact that Cisco and BNI already have a history together, Clemson said BNI employees would be able to walk across the parking lot from their headquarters in Boxborough to Cisco’s New England Development Center to further their integration efforts.

Compton said aside from BNI’s technology, Cisco bought the company because its employees were well versed in engineering principles for video and Internet technologies.

“It’s a terrific outcome for our customers, our employees, Cisco and our investors,” Clemson said. “We built a great company, but we were at a tipping point where our customers were telling us it was time to scale. I think being able to do that in a culture such as Cisco’s, it’s going to light up our ability to grow our business faster and more effectively.”

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