Cisco/Tandberg Deal All but Done

The news that the European Commission and the U.S. Department of Justice have approved Cisco’s acquisition of Tandberg was expected. The deal, initially announced last autumn, is expected to close in the next few weeks.

Digging a bit into the story reveals just how young an industry telepresence is. Cisco says the sector is worth $3 billion in 2010 and could grow to $7 to $10 billion in the next five to seven years. That’s not a lot of money in the framework of an industry segment. The $3 billion figure points to a long slog, and the five-to-seven-year number suggests that progress will indeed be slow.

A second sign that the telepresence element of the teleconferencing industry still is young is that it continues to work through the standards morass. This is a rite of passage for telecommunications disciplines. A condition under which Cisco got the go-ahead from the EC and DoJ was that it divest itself of its TelePresence Interoperability Protocol (TIP), which the company wants to see adopted as a standard. Cisco, in an effort to make this happen, already has put TIP into the public domain, eWEEK says. The story says Polycom, a telepresence competitor to Cisco, is (not surprisingly) resistant to TIP.

Such back and forth is normal. Right now, telepresence systems that can’t interoperate with each other – Cisco gear sending and receiving images and audio from Polycom equipment, etc. – are clearly not in a position to exceed, or perhaps even reach, the Cisco revenue estimates. Communications channels in which products from one vendor can’t communicate with gear from another are by definition limited. It’s a hurdle that must be overcome.

As if to celebrate, Cisco announced its largest telepresence implementation to date. The vendor has sold “an initial” 200 units to the Bank of America. BOA, the press release says, already has 28, probably in a beta project. Cisco will manage the system.

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