Cisco picks up Scientific Atlanta for $7 billion

Cisco is about to move from the data center into your living room. The company has announced plans to buy set-top box provider Scientific Atlanta for $5.3 billion. Cisco will also acquire Sci Atlanta's cash horde of $1.7 billion, making the final value of the deal about $7 billion. With cable companies increasingly moving into the internet business, the deal positions Cisco to grab a big piece of the market for VoIP hardware, cable modems and related equipment, pitting it against companies like Motorola, which also has a significant set-top and cable-modem business.

[jesse @ Dec 19th 2005 1:37AM]

for the sake of consistency, shouldn't you have a picture of the cisco logo instead of the scientific atlanta logo? you had the buyer's logo on the previous story.

[Ken @ Dec 19th 2005 1:37AM]

Great now the rental price on my digital cable box is going to go up.

[mikey @ Dec 19th 2005 1:37AM]

to #1

seriously, get a life you fucking dork.

[Roopesh Sheth @ Dec 19th 2005 1:37AM]

#2 (Ken) - No, now you'll have to pay a maintenance fee. And have to choose a maintenance support level (do you want 8x5 support, 8x7 support, 24x7 support).

Seriously, though. CableCard v2.0 needs to be finalized and rolled out. Without a better CableCard offering, you're stuck with cable boxes for now.

[jesse @ Dec 19th 2005 1:37AM]

mikey:

i'm at work. what do you expect me to do? work?

[Adam @ Dec 19th 2005 1:37AM]

Why is it $7 billion? If they're paying 5.3 and getting the company AND 1.7 of their CASH, the net they'd be "paying" is 5.3 - 1.7, not 5.3 + 1.7. It would be worth a net $3.6 Billion.

Now, other outlets are reporting Cisco is paying 6.9 and getting 1.6 cash back = net $5.3 billion.

So we're back to $5.3 billion.

[TAZ427 @ Dec 19th 2005 1:37AM]

I think this has great potential.

You can make a real residential gateway for the house by the marriage of their technologies.

The've been talking about residental gateways for a long time, but nobody's got an econmoical system that would integrate. They could integrate Broadband, Routing (LAN and WLAN), Cable Tuner/DVR, Media Center, VoIP all in one box.

As for the comments on service. The class of support you get for Cisco's consumer items is significantly different from that of say the service for their industrial routers.

[super_structure @ Dec 19th 2005 1:37AM]

Okay, I'll be the first to admit that Cisco (or Linksys) may not have the most stellar support of any company. That being said, when was the last time you ever called anyone for support on your cable box? And did it consist of anything more than "Comcast, your box is broke, please come replace it."?

Cisco makes great equipment and they've got enough clout and vested interested they might be able to get some real IPTV in the living room.

[d'apprentice @ Dec 19th 2005 1:37AM]

You'd definitely want to sell 1.7 billion cash if you weren't entitled to keep the cash in the first place.
See what Cisco is now capable of offering: http://www.sciatl.com/aboutus/productsandservices.htm

[TAZ427 @ Dec 19th 2005 1:37AM]

Adam,

No the final deal is $7 billion.

Nobody said their buisness was worth $7B only that the deal was $7B because you still got to pay for their cash assests. So Cisco is buying them for $7B and in that deal they get a $5.3B buisness plus $1.7B in cash assests.

Think of it this way you buy a car. Base price is $20K but they added $4K worth of options that you later plan to strip out and sell. You still bay $24K for that car. After you strip out and sell the $4K worht of stuff you didn't want, you got a car worth $20K but you still made a deal for $24K.

[TAZ427 @ Dec 19th 2005 1:37AM]

I have called Cisco on my VoIP box and LinkSys on my router. Both having moderate customer support.

I've also called Cisco on a $50K CMTS Router Box when I was working on DOCSIS cable modem development and we had the pay by the hour service plan, so I've seen both sides of the fence.

[Bryan @ Dec 19th 2005 1:37AM]

#8 - actually i beg to differ on that one. i've had to replace 3 of my digital cable dvr boxes from Time Warner.

and dont even get me started on how much Linksys routers suck for the price. Netgear has earned my business now.

[Ken @ Dec 19th 2005 1:37AM]

# 4, No I have cox cable they will be the ones doing the Customer service but now it's going to cost them a crap load for it and the boxes themselves. And I know Cox is going to be "passing the savings" onto me by making me paymore to rent it. Guess it's time for me to find a digi cable box not made by Sci atla. or Cisco and use that instead hell at least that way I don't have to rent the box anymore

[Brian Flowers @ Dec 19th 2005 1:37AM]

Awesome. Maybe now SA's stuff will actually, you know, work!

[Adam@Ottawa @ Dec 19th 2005 1:37AM]

To those concerned about what this means for SA, I'd venture to say nothing. Look what happened with Linksys - Cisco has bought them, and now the Cisco logo is on a few boxes. Linksys products still only work for 3 hours at a time (I'm being optimistic) and need to be replaced monthly - the exact same level of quality and service when they were on their own.

The only thing on my wishlist is a SARA redo (The OS on Explorer boxes). This thing has been begging for a ground-up rewrite for at least 3 years. Maybe someone at Cisco will look at it and shudder the same way I do?

Anyhow, I don't think there's anything to see here - move along.

[wayne @ Dec 19th 2005 1:37AM]

Maybe they will finally develop a reasonable method for CONSUMERS to provide bugs, feedback, etc about their home equipment. Since SA's
"customers" are really the cable companies, and not the consumer, they currently don't have any way for me to tell them how much the SA Explorer 8000 I have sucks...

Agree with #15, SARA needs a redo badly!!

[Steven J. Ackerman @ Dec 19th 2005 1:37AM]

Too bad...

Now my set top box will join the non-functional Linksys crap they're pushing out the door...

[Johman @ Dec 19th 2005 1:37AM]

For a long time Cisco has been talking about network convergence, the idea that data, voice and video traffic will one day travel over a single network. The vision has already come to fruition within the carrier's network. Most cable operators and phone companies carry their internal traffic over an Internet protocol, or IP, network that uses Cisco routing and switching equipment.
Now the trend is finally making its way into the home, as cable companies and phone companies start offering customers a triple play of services that includes high-speed Internet access, telephony and, finally, video--all over an IP network.
Cisco Systems, maker of Internet routers, switches and other networking gear, will acquire Scientific-Atlanta, which makes TV set-top boxes and other video transmission technology.http://www.analogstereo.com/cheap_voip_provider.htm
Bottom line:The acquisition, one of Cisco's largest by far, means the company will be able to supply much of the gear that cable operators and phone companies need to provide increasingly sophisticated video services to consumers.
It's this fundamental transition in how TV service will be delivered in the future that makes a deal between IP networking gear maker Cisco and cable equipment maker Scientific-Atlanta seem auspicious