Cisco's Video Transformation
by Craig Matsumoto
It's been evident for some time that Cisco Systems Inc. is keen to position itself as a video company more than a router company.
Expect to hear a whole lot more about that this week -- and prepare to be bombarded with a new buzzword dreamed up by the Cisco marketeers. That new buzzword, being unveiled Monday, is "medianet," Cisco's term for an IP network built with video in mind (as opposed to the regular IP network, which was built for best-effort data traffic).
The medianet concept will be at the heart of a major marketing assault that begins Tuesday at C-Scape, Cisco's annual analyst conference, where the vendor's executives will outline the company's new video strategy.
"When we set out last year, John Chambers said video is going to be one of the top priorities -- 'top' meaning 'way up there' -- and we're going to make this video thing cut across the business," says Murali Nemani, Cisco director of marketing for service provider video.
"What we're doing now is saying, 'Here's the strategy we've built as an entire company, and here are the products,' " adds Nemani.
That strategy could cut across all of Cisco. "Five years from now, Cisco will look like an entirely different company," says Zeus Kerravala, an analyst with Yankee Group Research Inc.
Cisco isn't doing this just because video is cool. The company needs to find ways to keep expanding its market, so it's in Cisco's best interest to convince customers to not only upgrade their networks for the video age, but to provide the necessary equipment.
"If they [Cisco] can't get video to take off, then they're going to have trouble selling a lot of other things," Kerravala says.
To be fair, many signs already point to video becoming a major driver of traffic. Cisco's own estimates say half of all consumer IP traffic will be video by 2012, up from an estimated 32 percent this year. And while CEO John Chambers has talked up Web 2.0 and collaboration quite a bit during the past couple of years, video is a larger topic, and one that more directly affects Cisco's router franchise.
"It's a valid obsession due to the traffic growth and video being the fastest and thirstiest out all traffic applications on networks," writes analyst Ray Mota of Synergy Research Group Inc. in an email to Light Reading.
The video push comes at a time when Cisco is having to cut back, conceding that the tough economy is likely to linger. CEO John Chambers asserted last week that he's still comfortable with long-term growth predictions of 12 to 17 percent, but for the near term, Cisco is working at trimming $1 billion from its budgets.
Charting strategy
The medianet plan represents a more organized approach by Cisco towards video, and that integrated view of video is how the IP giant might choose to differentiate itself from other video players.
"The regular video companies," such as Polycom Inc. and Tandberg ASA, "sell you video products. I think what Cisco is trying to sell you is a video strategy, and that's different," Kerravala says. "I don't think the traditional video companies have done a good job at that." And so far, Cisco hasn't either, he adds.
The medianet initiative starts with two new product announcements, coupled with a very recent video-related launch:
The Media Experience Engine (MXE) 3000, a video processing appliance. It handles functions such as transcoding -- the translation of video to different formats depending on the receiving device -- although that capability won't be available on-the-fly until sometime in 2009.
The box also handles post-production tasks: It can automatically add a digital watermark, or splice in a corporate intro or other fixed content.
Here's a crucial point, though: The MXE 3000 is intended for enterprise networks, not consumer video. If Cisco has its way, the device will draw together routers, TelePresence, and digital signage into one big corporate-video love-in. Cisco is convinced that enterprises will be generating and consuming increasingly large volumes of video in the future.
Of the medianet pieces being introduced today, this one seems to best reflect the sweeping long-term ambitions Cisco has for video.
A firmware upgrade to Scientific Atlanta set-top boxes, to let them handle video quality in a new way. The boxes can now monitor video streams for dropped packets and, before the affected video frames reach the TV set, request that the missing packets be resent. This interception and correction can happen quickly enough to prevent the viewer from noticing anything went awry, Nemani says.
This capability, aided by some other new functions such as forward error correction, is being called the Video Quality Experience, and has been used already by Portugese operator Sonaecom .
The Advanced Video Services Module, an edge-router linecard that incorporates technology from the Arroyo video server acquisition. This was announced as part of the ASR 9000 launch last month.
Cisco says there's even more on the way, and soon.
"You're going to see a steady stream of announcements in January as proof points of how we're implementing medianet," Nemani says.
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