The companies plan to make their equipment work with each other six months after the deal closesrn

Cisco, Tandberg announce interoperability plans

If Cisco Systems Inc.’s offer to acquire Norwegian video equipment maker Tandberg SA is approved, the manufacturers plan to make their conference products work with each other within six months, company officials said Thursday.

“We will need a couple or three months to work to implement and test” the interoperability, said Marthin De Beer, Cisco’s senior vice-president for emerging technologies.

Cisco announced its offer to buy Tandberg SA of Oslo, whose products include Telepresence T3, for US$3 billion in cash after hours Wednesday. Although it is a friendly takeover, with Cisco planning to retain Tandberg CEO Fredrik Halvorsen, most publicly-traded companies cannot get acquired until a majority of shareholders approve the deal. In addition, the U.S. Justice Department’s Anti-trust division and European Union normally review mergers of this size.

Cisco announced its Telepresence product line in late 2006.

De Beer said if approved,  the acquisition gives Cisco the “full range of technologies and end points from the board room to the desktop.”

It will also let Cisco sell the technology to small and mid-sized firms, said Hakon Dahle, Tandberg’s chief technologist.

Dahle and De Beer made their comments Thursday during a video conference for journalists and analysts.

Officials from Tandberg and Cisco did not say whether they would continue to sell Tandberg’s T3 high-end telepresence system as a separate brand or whether they would use Tandberg’s technology for telepresence products in Cisco-branded products.

But Cisco CEO John Chambers did say the product “overlap” between the two companies is “minimal.”

Chambers added Tandberg has been good at making its products work well with video equipment from other vendors, including Sony and Polycom.

“It takes away the worry from some people (they will be) locked in” to one vendor, Chambers said.

Halvorsen said the companies will not be able to collaborate on the products until the deal has been approved.

De Beer said the companies plan to transfer two Cisco telepresence engineers to Europe, and to send engineers from Tandberg’s Oslo and London offices to San Jose.

Cisco has been pushing videoconferencing for a number of years, and is already reselling some of Tandberg’s products, according to Steve Blood, vice president at market research company Gartner.

The acquisition plugs the gap between Cisco’s HD-based telepresence systems and its Unified Video Advantage system for desktop videoconferencing by adding room-based conferencing that supports standard definition video, he said.

It is a good acquisition and will help Cisco get a leg up, but the company paid a lot compared to, for example, the US$900 million Avaya paid for Nortel’s enterprise business, according to Blood. Cisco is better-equipped to expand the videoconferencing market than Tandberg on its own or competitors such as Polycom, Blood said.

With files from Mikael Riknas

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