Photographer: David Paul Morris/Bloomberg
Cisco Is Said to Seek Buyer for Digital-TV Software Unit NDSBy and
Deal would unwind $5 billion acquisition made in 2012
Unit is part of shrinking service-provider video business
Cisco Systems Inc. is seeking a buyer for its video-software unit, according to people familiar with the process, part of an effort to sharpen focus on the fast-changing network-infrastructure business.
The San Jose, California-based company is soliciting offers for NDS Group, said the people, who asked not to be identified because the process is private. A Cisco representative declined to comment.
Chief Executive Officer Chuck Robbins is trying to keep Cisco competitive as the networking business shifts away from the expensive, fixed-purpose machines and locked-down software that once dominated the industry -- and helped Cisco become one of the biggest companies in tech. Shedding NDS, which Cisco acquired for about $5 billion in 2012, would speed Cisco’s exit from technology used in traditional TV services following the company’s sale of its connected-device business, the former Scientific-Atlanta, in 2015.
NDS’s products are used to send interactive content to television set-top boxes, digital-video recorders and mobile phones. The business is part of Cisco’s service-provider video unit, which has reported declining revenue since 2014. Traditional subscription-based TV services have struggled to hold on to their audiences as more consumers turn to streaming offerings such as Netflix Inc. and Amazon.com Inc.
Robbins has been trying to jump-start growth by purchasing providers of software and services that can be delivered over the internet. That’s a push aimed at tapping demand from companies that are gearing up to use networks to outsource their computing needs. He’s also overseeing the introduction of more flexible switches and routers designed to make Cisco’s products more appealing to companies such as Amazon Web Services and Google, which are increasingly developing their own cheaper hardware.
The company’s shift toward becoming a software provider that books recurring revenue has been more difficult than at other companies because Cisco has traditionally been paid up front for hardware, Robbins has said. The network-equipment maker hasn’t recorded annual sales growth of more than 10 percent since 2010.