Cisco Systems to Acquire Arroyo Video Solutions

San Jose, Calif.-based Cisco Systems recently said it will acquire privately held Arroyo Video Solutions Inc., a provider of next-gen solutions for on-demand television and consumer services, for $92 million in cash.

The Arroyo solution offers a platform for video-on-demand today and emerging time-shifted services. 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 televisions, personal computers, mobile handsets and emerging media devices.

Arroyo was founded in 2002 and has 44 employees in California and Utah. Several industry veterans will join Cisco from Arroyo including Drew Major, a founder of Novell and industry icon recognized for his expertise in network operating systems, distributed systems and content delivery networking; and Paul Sherer, former chief technology officer at 3Com and key contributor to a broad portfolio of networking patents and technologies.

"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," said Michelangelo A. Volpi, Cisco senior vice president and general manager of 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."

The deal is expected to close in the first quarter of Cisco's fiscal year 2007, ending Oct. 31, 2006. Upon close of the transaction the Arroyo team and product portfolio will be integrated into the Cisco Cable & Video Initiatives Group within the Service Provider organization led by Volpi.