Cisco strengthens video on-demand capabilities with Arrayo buy

Cisco Systems Inc. will acquire on-demand video software company Arroyo Video Systems Inc. for US$92 million, Cisco said Monday.

The buy is Cisco’s second so far this month, having taken a majority stake in data center company Nuovo Systems Inc. on Aug. 10.

Arroyo will give Cisco a greater range of offerings for video-on-demand, which allows users of traditional cable television and IPTV (Internet Protocol TV) to purchase and watch content such as music videos, television shows, and feature films, at the place and time of their choosing.

Arroyo’s software will likely be integrated with set-top boxes and equipment from Cisco’s earlier purchase of Scientific-Atlanta Inc., valued at US$7 billion, which was announced in November, 2005, and closed in February this year. Scientific-Atlanta was one of the world’s largest producers of set-top boxes.

The Arroyo deal will close before the end of Cisco’s first fiscal quarter for 2007, which ends Oct. 31, 2006. The acquisition will become part of Cisco Cable & Video Initiatives Group, the company said.

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