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Cisco and the Video Conference Market

To understand the Cisco video conferencing product line, it is essential to understand both Cisco's position in the IT field and the evolution of their video conferencing product line.

In 2006, Cisco announced it had entered the video conferencing industry by launching product and defining it as an experience they called "Telepresence". Using multiple codecs and monitors in a room engineered for high quality A/V presentations, Cisco created a look and feel that changed the concept of boardroom video communications.

Cisco's dominant position as an IT backbone product manufacturer assured that network issues, common in lower quality video conferences, were not negatively affecting their Telepresence experience. As a result, Cisco was able to successfully cultivate a new concept in high quality video conferencing. The concept of a Telepresence meeting has become synonymous with Cisco.

Cisco's rollout of Telepresence products encountered a problem, however. The problem was that large businesses generally had many dozens and in some cases hundreds of non-Telepresence set top video conferencing systems installed throughout their organizations. Retooling to a much costlier and space hungry Telepresence system was not a likely roadmap for these organizations.

Cisco acquires Tandberg

In 2009, Cisco, solved the one-product problem it had in its product line by announcing the acquisition of Tandberg, a leading Norwegian manufacturer of video communications products. Tandberg had a broad product line of leading set top and mid tier video conferencing products that Cisco did not have in its own video product portfolio. Additionally, Tandberg, itself had created and begun marketing of its own Telepresence system which was gaining wide popularity.

Why is Tandberg still important?

In addition to finding its own success in the Telepresence market with what Tandberg called its T3 system, Tandberg had made a strategic acquisition prior to being acquired by Cisco which made it quite valuable.

In 2007, Tandberg acquired a high quality multipoint control unit manufacturer called Codian. And, so at once, with the acquisition of Tandberg, Cisco added to its dominant IT hardware position, a broad product line for video conferencing endpoints and also a high quality multipoint control unit product line. This set the stage for Cisco to leverage its strong IT position into the video conferencing market.

Tandberg and Codian products are widely known by name among customers globally and the brand loyalty clients feel towards these products is high. Cisco has similar strengths in the IT market and so the merging of these strong brand allegiances, has the potential to accelerate Cisco's growth in both the video conferencing and IT marketplaces.

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