Harmonic’s Omneon Acquisition Foretells Further Consolidation

BOSTON: Harmonic planned $274 million acquisition of Omneon has positive implications for the professional media industry, Doug Sheerer says.

“Regardless of Harmonic’s clear leadership position in encoding, they could have still been viewed pretty narrowly as a solutions provider for only a relatively small slice of the broadcast and professional work flow,” said Doug Sheer of D. I. S. Consulting in New York. “With the addition of Omneon, they are able to greatly broaden their solutions offerings in a very--no pun intended--harmonious way, that builds on their already established strengths in the post-production part of their customers’ operations.”

Sheerer partnered with Strategy Analytics on an industry report examining the acquisition. Harmonic announced last week it agreed to buy Omneon, the server specialist in Silicon Valley. Omneon had sales of $105 million last year. Harmonic’s revenue totaled $320 million.

The report “suggests that, in spite of strong synergies, there will still be challenges for the new venture around issues such as developing common pricing strategies, managing workforce evolution and meeting the changing expectations of the customer base,” which is true of any such merger. It also suggests that the outcome will lead to both companies playing “a leading role in the wider industry consolidation which is expected as market recovery continues.”