Cisco Systems Acquires Norway’s Tandberg Video Communications for $3 billion

Cisco Systems has announced today that its buying Norway’s Tandberg video communications business for $3 billion.

The deal should enhance Cisco’s own TelePresence business where it sells room-sized video conferencing systems that make you feel like you’re talking to people in the same room. These systems costs hundreds of thousands of dollars each but executives feel they can use them to save on travel costs. Tandberg is one of the chief rivals in the business and it makes specialized software for managing the conferencing systems and managing the connections between them.

This new deal is going to put a lot of pressure on Hewlett-Packard who have a very strong video conferencing business with their Halo product. In theory, video conferencing creates a lot of Internet traffic, which in turn helps Cisco’s core business of selling networking gear.

Cisco has bought 40 companies over the past five years, according to the New York Times. In the past week, merger mania has erupted, with Dell buying Perot Systems for $3.9 billion and Xerox buying ACS for $6.4 billion.

Tags: cisco halo hewlett-packard new york times norway scandinavia tandberg video video communication video communication business video conferencing