Billy McInnes
1 August 2008
Five and a half years after its $500m acquisition of Linksys, Cisco made two interesting investments in the home networking space last month, buying Pure Networks and investing in Celeno Communications.
Both investments were designed to address the next stage of home networking beyond the current model, dubbed “Home Networking 1.0”, where home networks link PCs and peripherals with a shared broadband connection.
Linksys has been very successful in helping to deliver this version of home networking – at the CES show in January Greg Memo, vice president and general manager, Linksys Consumer Business Organisation, said it had shipped 70 million wireless devices as of October last year.
But just as Cisco has sought to define and implement a vision of “intelligent networking” at the corporate level, it is trying to take the concept to the home market through Linksys.
This explains Cisco’s $120m acquisition of Pure Networks, which specialises in home network management. In addition, Pure has been providing the software used in Linksys Easy Link Advisor (LELA), which is designed to help consumers set up, manage and secure a home network.
Cisco said the acquisition would lead to further development of the LELA platform to “serve as the base for new multimedia-enabled applications, tools and capabilities” as the shift from Home Networking 1.0 to Home Networking 2.0 leads to “a multitude of disparate network devices, applications and services that are connected to one another”.
Using Pure Networks’ management software and Home Network Administration Protocol, Cisco believes it can make devices such as digital cameras and media players intelligent enough to recognise and talk to each other over a home network without going through a PC.
Five days after the purchase of Pure, Cisco played the lead role in a $16m investment in Celeno Communications. The Israel-based company has developed a WiFi system on a chip designed to provide “robust, whole-home multimedia and entertainment distribution over wireless home networks”.
The technology enables home gateways, multi-room DVRs and media servers to distribute multiple simultaneous video streams to set-top boxes, PCs, televisions and other WiFi-enabled consumer devices.
Paul Jackson, principal analyst at Forrester Research, said Cisco’s approach had been partly fuelled by the realisation that the consumer market required a stronger focus on manageability and ease of use because few consumers have networking expertise.
He added that Cisco was in a position to support both PC-centric and non-PC-centric approaches to home networking in the future, whereas vendors like Microsoft, Intel and Dell were more likely to focus on the PC as the main element of a home network.
