Where is Cisco’s Living Room Strategy?

With all the talk about Apple TV and the coming Google-ization of the living room, I can’t help but think of another tech giant whose name is missing from these conversations: Cisco.

The reason Cisco is worth contemplating in this context is that the company — on paper at least — has always held a lot of cards in the high-stakes game of living room convergence. Notably, that includes:

But even with these assets, Cisco has been a no-show in the recent buzz about the connected living room. As Apple re-vamped Apple TV, Google launched a big TV initiative, and others have pushed heavily into the connected TV space, the networking giant has remained largely silent.

What is the Problem?

Why hasn’t Cisco been a part of the larger conversation around the future living room?  In a word, software. The company has never been exceptionally strong outside its core hardware strengths, and its software Achilles heel is exceptionally apparent in the living room, where consumers expect elegance and ease-of-use when it comes to the user-experience.

It’s certainly not for a lack of trying. In recent years, the company has made a string of acquisitions in an attempt to strengthen its consumer software story:

  • KiSS Technologies (2005): a networked entertainment company based in Europe
  • Pure Networks (2008): a home-networking software player
  • Pure Digital (2009): the owner of the Flip camera franchise with a strong software and UI story to go alongside the obvious Flip brand benefits
  • ExtendMedia (2010): an online video platform software play targeted at giving Cisco’s video division an answer for TV Everywhere

But even after all of this money spent, Cisco still doesn’t figure into the conversation about who will rule in a connected TV/app-TV centric living room. To be fair though, the company is not completely to blame, as it is no doubt hamstrung by its customer base. Large cable providers are Cisco’s main customers in the living room today, and these companies prefer to have their brand foot-forward, even if they aren’t doing a whole lot of innovation themselves.

What Should Cisco Do?

Nonetheless, a more focused entry into the living room race seems necessary. In order to do that, Cisco should go big, carriers be damned. Cisco needs to bring some signficant software development in-house as well as harness the power of independent software developers by offering a services and application platform. In other words, if they build it (or buy it), the MSOs will come.

Does this mean buy Skype, as has been rumored? I think Skype could be part of the answer, as the VoIP player has already moved into the TV space and is offering its own SDK for apps and services on CE devices. There’s no doubt the company would bring Cisco a low-end offering for video chat to go with the high-end telepresence dreams of Chambers.

Another potential platform-play could be Boxee. It’s a smaller company, sure, but it  still would bring a development and OTT apps platform that Cisco could offer on its own devices and potentially with willing CE and set-top box partners.

But be it with Skype, Boxee or someone else, Cisco needs to move to get solidly into the connected TV market. A strong software and application development platform means Cisco will not only to stay relevant, it will also provide its carrier partners with a solution they can’t seem to provide themselves.

Related Research: 3 Things Apple iTV Must Do to Succeed

Question of the week

What steps should Cisco take to enter the connected TV conversation and compete with the likes of Apple and Google?
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Michael Wolf

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3 Comments Subscribers to comment
  1. Use the Cius tablet as a way of controlling the viewing experience. Use speech as a way of searching content (browse with fingers, search with voice). Get Rovi.

  2. @jjonessm – Wow – that’s bigger than I suggested :) – though it would probably rival an acquisition of Skype. I think buying Rovi makes sense to some degree – it would also give them massive metadata management assets as well as owning the grid-guide nav patents, but I don’t know if relying on Google/Android is the way Cisco should go. Getting in bed with Google means not controlling your own destiny, something I think Cisco needs to do more of, particularly in software.

  3. They should do a deal with Google to fully integrate Google TV & Android into their set-top boxes and Linksys products, then they should buy Rovi for the massive patent portfolios around TV based search and navigation, then they should buy Akamai for its IP based video delivery service. The end result would be ownership of the front and back end of IP based video delivery => great Google UI with full integration between the phone, computer, tablet, and set-top box; royalty payments on most TV based search and navigation functions; ownership of the best platform for the delivery of IP based video content.

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