Cisco’s purchase of leading videoconferencing company Tandberg could be a boon for K-12 and higher-education officials willing to pay for a high-quality online meeting space, but technology experts expect free videoconferencing programs to remain the choice of students.
Higher-education technology officials said the major shift in videoconferencing might not make its greatest impact in lecture halls and classrooms, where free online videoconferencing services are favored by faculty members. Campuses’ dwindling budgets during the economic recession, officials said, could put pricey videoconferencing technology out of reach for many educators.
Ray Schroeder, director of the University of Illinois Center for Online Learning, Research, and Service, said free online webcasting programs will remain widely used in education, but administrators and decision makers who conduct campus-to-campus meetings will gravitate toward the high-end video products that will emerge from the Cisco acquisition.
“You have a lot of competition out there which has driven the cost down,” he said. “Now when you take Cisco and Tandberg . . .they almost have to be more expensive because of the quality they bring to the marketplace.”
Schroeder said the videoconferencing service at his university costs about half of what it did five years ago thanks to the expansion of the online videoconferencing market. But the Cisco-Tandberg combination will attract university officials looking for a secure online meeting place that provides high-quality close-up shots, document cameras that show details on a page, and multiple camera angles for large-scale web-based meetings.
“Cisco has all [the resources] under the sun, and Tandberg has high-quality products,” Schroeder said. “They can provide very crisp video images.”
Cisco announced Oct. 1 that it would buy Norway’s Tandberg for $3 billion in a bid to dominate the global market for videoconferencing equipment. By experts’ estimates, Cisco is paying twice the annual value of the entire global market for videoconferencing equipment, which reportedly is approximately $1.5 billion.
Cisco, the world’s largest maker of computer networking equipment, had a cash balance of more than $35 billion at the end of July, most of that overseas. By buying an international company, Cisco is avoiding the U.S. taxes it would have had to pay to bring the money home.
The all-cash deal is Cisco’s first acquisition of an overseas public company, CEO John Chambers said. Chambers said the acquisition “showcases Cisco’s financial strength and ability to quickly capture key market transitions for growth.”
Cisco has been focusing on the high end of the videoconferencing market, selling so-called “TelePresence” systems with multiple plasma screens that present life-size images of the participants to provide the illusion of face-to-face communication.
With Tandberg, Cisco gets the leading maker of video systems that range from small “videophones” to full conference-room setups.
Free videoconferencing services include Apple’s iChat, which uses the iSight camera and microphone built into most Mac computers and laptops. iChat tells users which friend or family member is available to talk with face-to-face, and whether the person has audio or video capabilities.