The decision has baffled nearly everyone I’ve talked to about it. While changes were expected at Cisco, especially in light of last week’s letter by CEO John Chambers to employees in which he promised “bold steps” and “tough decisions” and “surgical precision” with regard to what needs fixing at Cisco, it’s hard to see how shutting down the Flip unit, even for its meager size within the giant company that Cisco is, amounts to a good business decision.

If Cisco wanted to be rid of the Flip Digital business, why not try to sell it? I asked a Cisco spokeswoman about this today and the only answer I got back: “We performed a detailed analysis and determined that the best decision was to shut it down.”

It can’t have been much of an analysis judging by the reaction among consumers and other companies who might have been interested in buying it–had they been approached. There are probably several companies in addition to the three who made themselves known to BoomTown’s Kara Swisher who would have been interested in buying the Flip business from Cisco.

Exhibit A: As I noted earlier today, the Flip is the best-selling consumer camcorder in the U.S., according to the market research firm NPD, beating out names like Sony, Kodak and Canon.

And yes, I’ll grant it’s a small business when compared to the rest of Cisco’s large carrier-class and enterprise networking and switching unit business, but look at these numbers from Cisco’s most recent 10-K filing. Cisco reported $40.4 billion in revenue last year. Sales in the Flip business unit were small enough that they got lumped into the “other revenue” category along with sales generated by the newly acquired Tandberg video conferencing business and a batch of others.

This “other revenue” totaled $2.6 billion in Cisco’s fiscal 2010, up from $1.6 billion in fiscal 2009. The biggest single factor for that billion-dollar boost was $317 million in Flip camera sales. You read that right: Cisco just shut down a business that brought in $317 million in sales in its last fiscal year.

And yes, that amounts to less than one percent of Cisco’s overall sales. But it had to be a profitable business. I submit as Exhibit B a teardown analysis of the Flip Mino HD camera conducted by the market research firm IHS iSuppli shortly after Cisco’s $590 million acquisition of Pure Digital in March of 2009.

At that time, a Flip Mino HD cost $54.23 in direct materials to build. The four gigabyte model is still available today and sells for $160 at retail. This suggests that the gross margin on that model was easily in the 60 percent range. Additional costs of distribution and marketing and software can’t have eaten too far into that. Plus? That was two years ago. While flash memory costs are certainly volatile, all the other parts used in the camera have probably come down in cost since then.

On top of that, there’s brand equity that would have added to the potential price a buyer might have paid. Cisco poured considerable resources–though small by Cisco measures–into advertising the Flip camera. As Exhibit C, I submit the long progression of TV ads that Cisco aired to promote the brand. While it’s hard to say they were great ads, they worked, and they showed a lot of potential for the brand. Everyone knows what you mean when you say “a flip,” and as any branding expert will tell you, that kind of recognition doesn’t come easily. It’s also no small thing to get the daughter of the president of the United States to use your product during so momentous an occasion as a presidential inauguration. Oprah Winfrey praised them on her show, and on a day in 2007 gave one to everyone in the studio audience. Make no mistake, the Flip was and is a culturally significant product.

And with broad recognition comes a willingness by finicky retailers to take the risk and put the product on their shelves. Exhibit D: In its relatively short life, Flip cameras wound up in Best Buy, WalMart, Amazon and scores of other stores. A good retail distribution network isn’t easy to build. The Flip camera had it, and in fact most of the heavy lifting had already been done. All Cisco had to do was keep building them.

All this is not to say that the Flip brand didn’t have its challenges, not least of all from the iPhone and numerous other smartphones. But there are lots of products that at least on paper are made obsolete by others encroaching on their territory, yet continue to exist for years. Not everyone has an Apple iPhone, nor even a smartphone, and not everyone has the presence of mind to use their phone to shoot video. Doing one thing well is for some people a virtue.

Take for example the cassette-playing Walkman stereo, which existed alongside the Discman portable CD player for years despite the obvious superiority of the compact disc. Some people without the patience to use or buy a smartphone would have continued to gravitate to the Flip for its simplicity and reliability. With a Flip camera there’s practically nothing to learn: Push the red button to start and stop recording, and plug the camera into your computer when you’re done. Though in the last year the product family had shown a pronounced lack of vision: The Flipshare TV device and the Slide HD camera were not well thought out extensions of the brand. Both were launched on Cisco’s watch, and as an indicator of unannounced products in the pipeline, they don’t say anything good.

Yet it’s hard to imagine that the Flip camera couldn’t improve incrementally over time. One thing its devotees always wanted, but never got? An external microphone port. And given all the professional bloggers and reporters who used Flips to enhance their journalistic efforts–I know at least half a dozen journalism professors who rewrote their lesson plans after their first encounter with a Flip–why wasn’t there ever a Flip Pro?

Cisco paid a big price for Pure Digital: $590 million in stock. Given that it contributed $317 million revenue in fiscal 2010, that valuation may not have been unreasonable. We don’t know what Pure Digital’s revenues were in the prior year. But let’s assume they were, say, $150 million, or less than half in the prior year. That would make the multiple that Cisco paid less than four times trailing revenue. Not a crazy price by any means.

So what price could it command now? That’s harder to say. There is, I admit, a pretty good chance that Cisco might have ended up selling it for less than it paid. Certainly no company wants to do that. On the day the acquisition was announced, Cisco shares were trading at $16.23, a dollar and change lower than they are trading today. I’m no accountant, but I have to wonder if there’s some kind of tax advantage to shutting it down versus selling it. (Feel free to leave suggestions in the comments.) But it’s also possible–if not likely–that a sale would bring in more than the $300 million restructuring charge that Cisco is taking to shut it down, re-align other business and fire 550 people. Though for a $40 billion company, it hardly seems worth the effort: $300 million amounts to three-quarters of one percent of revenue, making the potential proceeds mere pocket change.

Which brings me to my final point: Why did Cisco buy the Flip business in the first place? Ostensibly it was about consumer video or something. Cisco floated this utopian vision of consumers flocking to buy ?mi video conferencing systems for their homes and carrying Flip cameras in their purses and pockets and sending videos of school plays and soccer games to Grandma over Cisco-made home networks that were in turn connected to an Internet largely powered by Cisco’s industrial-strength routers and switches.

It wasn’t necessarily the wrong vision (well, maybe ?mi was, but let’s leave that aside for the moment). It may be that Cisco was simply the wrong owner. Cisco’s purchase was puzzling in 2009 and still seems puzzling now. But more puzzling is why Cisco seems to have gone to no effort whatsoever to find the Flip–and the several hundred people responsible for making it–a suitable home.

Right after BoomTown heard the sad news this morning that Cisco was jettisoning its Flip digital video camera division–part of a transparent effort to assure Wall Street that it was no longer serious about its wacky foray into the consumer market–I lobbed in a call to its founder Jonathan Kaplan to get him on video talking about the loss.

The Flip, of course, has been my go-to tool to harass and annoy Silicon Valley moguls, since it appeared on the scene many years ago. The technique for the simple device was to essentially stick it up someone’s nose until they cried “Uncle!” and told me what I wanted to know.

It’s not entirely clear why Cisco didn’t make more of an effort to sell Flip–I got three calls from big consumer Internet and electronics companies that would have been logical buyers this morning alone, all of whom said they would have seriously considered purchasing the iconic brand. It remains the top-selling camcorder in the U.S., with 21.6 percent of the market.

Cisco bought the start-up behind Flip, Pure Digital, in March of 2009 for $590 million in stock, and the product has sold many millions of units in its short and cruelly ended life.

The first commercially-branded Flips were, in fact, introduced at the third D: All Things Digital conference in 2005 by Kaplan, and he first talked with Cisco CEO John Chambers about selling the innovative Flip at D4 in 2008.

While Wall Street has been worried about the impact of smartphones, especially the iPhone, on Flip’s business–helped in part by Apple CEO Steve Jobs making that point in the photo here at a music event in the fall of 2009 (after which, Cisco defended Flip on Twitter)–it still boggles the mind why Cisco could not have found a new home for it, rather than lopping off all those jobs.

Flip has reportedly been profitable on a standalone basis, several sources said, although probably not when you glom all those shared Cisco corporate costs on top of its puny shoulders.

Flip’s axing, in fact, is clearly a lame attempt to get serious by Cisco–whose shares have been suffering of late–in order to assuage investors that it was focusing on its core business of networking after a series of consumer-facing experiments. While these consumer efforts were but a drop in the giant Cisco revenue bucket, killing them gets lot of ink.

Expect more such “We’re back!” announcements from Chambers and Cisco in the coming months, as it is part of the classic CEO Playbook 101.

Kaplan remained mum on all that in our chat in the Noe Valley Starbucks, which you can see below, along with my favorite Flip moment, where I got all up into Facebook co-founder and CEO Mark Zuckerberg’s business. I also added two other videos I did when my various Flip cameras met new versions in 2008 and in 2010.

Big single tear–it’s just not the same with an iPhone:

]]> http://allthingsd.com/20110412/video-after-cisco-sacrifices-his-baby-to-the-gods-of-wall-street-flip-founder-jon-kaplan-speaks/feed/ 10 http://allthingsd.com/20110412/cisco-kills-the-flip-video-camera-business/ http://allthingsd.com/20110412/cisco-kills-the-flip-video-camera-business/#comments Tue, 12 Apr 2011 13:39:30 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=4944 Cisco Systems today announced what it called a realignment of its consumer electronics business. The highlight, however, is that the Flip video camera business is being shuttered, and 550 people will lose their jobs. Cisco acquired Pure Digital, the company that makes the Flip line, in 2009 for $590 million.

At the time that Cisco acquired Pure Digital the Flip was flying high as the top-selling camcorder in the U.S., according to the research firm NPD Group, and by mid-2009 had clocked sales of about 2 million units. Stephen Baker, an analyst with NPD says on his blog that unit sales were essentially flat in 2010 and that the average selling price on a Flip camera rose by five dollars to $158. And though its hard to know what the gross margins are, Baker says Cisco’s Flip video unit was “far and away the leading consumer video camera company.” What probably did it in was holiday sales last year: Unit sales dropped by 19 percent versus 2009, though for that Baker blames “strategic marketing missteps,” rather than a drop in any underlying demand.

NPD numbers show the Flip maintaining its market share lead as recently as February of this year, with 21.6 percent of the market ahead of Sony which had 20.9 percent. Both saw their shares fall as Kodak saw sales of its Playsport and Playtouch video cameras pick up steam. Kodak boosted its share to 12.8 percent versus less that 5 percent a year ago.

The problem wasn’t the camcorder business. The problem was the iPhone. Months after Cisco’s purchase, Apple added video recording to the iPhone 3GS which went on to sell a million units during its first weekend on the market and 7.4 million units within a single quarter. Video recording is now so common on smartphones that it’s strange if a phone doesn’t do video, and at a quality that matches if not exceeds what a Flip can do. Given time, smartphones will be substantially better than Flip cameras, though again it’s hard to know what feature improvements were on the Flip camera roadmap.

Other changes announced by the networking giant: a plan to “refocus” its home networking business, the backbone of which was Linksys, the privately held home networking company it acquired in 2003 for $500 million in stock. Cisco says it wants more profits from that unit and wants it to be more closely tied to its core networking and infrastructure business.

Another change: The EOS business–essentially a software platform Cisco launched in 2009 that offered media companies a digital gateway into the home–is being gutted and its core video technology redeployed elsewhere within Cisco. Dan Scheinman, the unit’s general manager, Tweeted this morning that he had resigned from Cisco, saying the business had succeeded technically, but was about two years ahead of the market.

Cisco also said its ?mi consumer video conferencing product line–the one that had been the subject of the latest round of ads starring Ellen Page–will be integrated into its business telepresence products.

The reaction from investors has been tentatively positive. Cisco shares are up three cents to $17.50 this morning, though the price is still pretty close to a 52-week low. Cisco said it will take a $300 million restructuring charge.

Standard and Poor’s analyst Ari Bensinger quickly issued a short note reiterating his “Buy” rating on Cisco. “We see these moves as part of a new strategy to de-emphasize consumer-related products that have been dragging down profitability, and believe more announcements are on the way,” he wrote. “We are positive that CSCO is sharpening its focus on its core competency of routing and switching, which should see good growth opportunities as the industry migrates to the cloud.”

Here’s a two-year-old interview Kara Swisher conducted with former Pure Digital CEO Jonathan Kaplan, shortly after he had sold his company to Cisco. He didn’t stay long. Cisco announced his departure to “seek other opportunities” in February.

]]> http://allthingsd.com/20110412/cisco-kills-the-flip-video-camera-business/feed/ 9 http://allthingsd.com/20110406/chambers-promises-changes-at-cisco-but-the-task-ahead-is-a-big-one/ http://allthingsd.com/20110406/chambers-promises-changes-at-cisco-but-the-task-ahead-is-a-big-one/#comments Wed, 06 Apr 2011 14:48:32 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=4765 Shares in Cisco Systems are moving up this morning in the wake of yesterday’s frank epistle to employees from CEO John Chambers.

Conceding that Cisco has been “slow to make decisions” and “been surprised where it should not,” he promised to take “bold steps and make tough decisions.” The consensus appears to be that divestitures are coming.

Cisco has been an acquisition machine during the last decade, but has little to show for it. Obvious candidates for divestiture are its consumer products business, which includes the Linksys brand of home networking gear, and Pure Digital, the makers of the Flip Digital video cameras. Consumer products carry lower margins than other products, and Cisco’s already got enough problems with its gross margins, which have stood at 64 percent since 2008 and gone nowhere.

One problem, the analyst Brian Marshall of Gleacher and Co. wrote in a note to clients issued yesterday, is that Cisco has so thoroughly dominated its core networking markets that it has effectively saturated its market. In looking for new areas to grow into, Cisco has been forced to look for what Marshall calls “adjacent markets,” like consumer networking gear, TV set top boxes, among others, both of which sap the potential for margin growth.

And while it’s hard to argue that Cisco’s low valuation doesn’t create a buying opportunity, there’s a lot more to consider, Marshall says. While Cisco grew its total revenue base by 7 percent from 2008 to 2010, a group of smaller independent competitors–Marshall calls them the “chimps” compared to the Cisco “gorilla”–like Juniper, Checkpoint, F5 Networks, Aruba Networks and a few others–collectively added roughly the same amount of incremental revenue that Cisco did during the same period, and nibbled away at Cisco’s dominance in the process. “Innovative companies can still have an impact in the technology industry even when competing against an 800-pound gorilla,” Marshall wrote.

One ace in Cisco’s deck, Marshall says, is VBlock, a data-center-in-a-box made by VCE, a company Cisco jointly owns with EMC and VMWare, and run by former Compaq CEO Michael Capellas: Cisco adds the networking component, servers and management software, EMC brings the storage and VMWare brings the virtualization. The product is just getting off the ground, but VCE recently said it has a pipeline of orders worth $1 billion and 120 interested customers. It is at least something for Cisco bulls to hang their hats on for now.

]]> http://allthingsd.com/20110406/chambers-promises-changes-at-cisco-but-the-task-ahead-is-a-big-one/feed/ 0 http://allthingsd.com/20110210/cisco-consumer-unit-head-jonathan-kaplan-to-leave/ http://allthingsd.com/20110210/cisco-consumer-unit-head-jonathan-kaplan-to-leave/#comments Fri, 11 Feb 2011 01:30:53 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=3120 Cisco Systems announced that Jonathan Kaplan, SVP and GM of its consumer products unit and the former CEO of Pure Digital, the company behind the Flip line of digital video cameras, is leaving the company. The Consumer Business Group will now report to Marthin De Beer, who also heads the TelePresence and Emerging Technologies groups. The move comes a day after Cisco reported earnings that beat the expectations of analysts, but which included a disappointing forecast that sent Cisco shares down by more than 14 percent today.

]]> http://allthingsd.com/20110210/cisco-consumer-unit-head-jonathan-kaplan-to-leave/feed/ 0 http://allthingsd.com/20100727/newest-video-bet-by-disneys-steamboat-ventures-is-elemental/ http://allthingsd.com/20100727/newest-video-bet-by-disneys-steamboat-ventures-is-elemental/#comments Tue, 27 Jul 2010 19:38:56 +0000 Ty McMahan http://voices.allthingsd.com/?p=27624 Steamboat Ventures Managing Director Scott Hilleboe admits that investing in video technologies is a bit frenzied these days.

“The short-term horizon, it’s like the wild, wild west,” Hilleboe said. “The growth of online video is causing a land grab.”

Video is an important theme for Steamboat, which is affiliated with Walt Disney Co. (DIS), and the firm has a portfolio full of video investments. The most recent is Elemental Technologies Inc., a provider of technology for video processing that relies on graphics processing units, or GPUs.

Steamboat led the company’s $7.5 million Series B round, with participation from previous investors General Catalyst and Voyager Capital.

Steamboat invests in early to mid-stage, technology-focused companies pursuing opportunities in digital media and consumer technology. Other video investments include content delivery network EdgeCast Networks Inc. and camcorder maker Pure Digital Technologies Inc., which sold to Cisco Systems Inc. (CSCO) for $590 million in stock.

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]]> http://allthingsd.com/20100727/newest-video-bet-by-disneys-steamboat-ventures-is-elemental/feed/ 0 http://allthingsd.com/20100428/aliph-in-collaboration-deal-with-cisco-jawbones-in-the-workplace/ http://allthingsd.com/20100428/aliph-in-collaboration-deal-with-cisco-jawbones-in-the-workplace/#comments Wed, 28 Apr 2010 15:40:39 +0000 Kara Swisher http://kara.allthingsd.com/?p=27775

Today at a partner event, Cisco will unveil a wide-ranging collaboration with Aliph–a San Francisco start-up that is famous for its noise-cancelling Jawbone Bluetooth mobile headset–to deploy its software and device in its IP phones in the enterprise.

It is a big win for Aliph, since the networking giant is a dominant player in the arena to provide telephony solutions to businesses, part of its Voice and Unified Communications division.

The idea, said sources, is to use the Jawbone device and the software that manages it to allow workers to move around an office and have the call move with them, echoing increasingly mobile consumer behavior.

BoomTown had heard rumors of intense interest in Aliph by Cisco (CSCO) months ago and assumed a purchase to add to its growing consumer portfolio, such as its recent acquisition of Pure Digital’s Flip camera line.

But that did not turn out to be the case–instead it is more a partnership, said sources, to use Aliph’s technology.

The company was formally launched in 2006–in fact, at the D: All Things Digital conference–by Alexander Asseily and Hosain Rahman, who met as Stanford University undergraduates. It is funded by Khosla Ventures and Sequoia Capital.

With the stylish and innovative Jawbone–the most recent of which is reviewed here by The Mossberg Solution’s Katherine Boehret–Aliph turned a lot of heads in the wireless headset space, aimed directly at high-end consumers.

Now, it is apparently pivoting into the workplace.

While Rahman confirmed the collaboration, he did not give a lot of details, although he did agree to sit down with me last night to broadly sketch out the new relationship.

Here’s the video of the interview:

]]> http://allthingsd.com/20100428/aliph-in-collaboration-deal-with-cisco-jawbones-in-the-workplace/feed/ 0 http://allthingsd.com/20100312/index-invests-25-million-in-sonos-plus-a-video-interview-with-vc-mike-volpi/ http://allthingsd.com/20100312/index-invests-25-million-in-sonos-plus-a-video-interview-with-vc-mike-volpi/#comments Fri, 12 Mar 2010 17:00:57 +0000 Kara Swisher http://kara.allthingsd.com/?p=25424 Earlier this week, BoomTown had lunch with Michelangelo “Mike” Volpi, the high-profile tech exec who turned into a venture capitalist recently at Index Ventures.

We also did a video interview (see below) about his new life as an investor, based in London, although Volpi managed to leave out the big news.

That would be a just-inked $25 million investment by Index from its growth equity arm in wireless home music system maker Sonos, as well as a new board seat there for Volpi. (Sonos’s hot new S5 unit is pictured here.)

In an interview this morning, Sonos CEO John MacFarlane said the money would be used for expansion at Sonos, which is just about to introduce its products to China and Japan.

“This investment is going to help us grow,” said MacFarlane. “We have wind at our back and this will help us a lot in keeping up that momentum.”

MacFarlane said the focus for Sonos, which has garnered $65 million–from BV Capital and mostly angel investors–with the Index investment included, is growth. He declined to give Sonos’s valuation in the new round.

The private company has been profitable, MacFarlane said, but its goal is to break even as it takes advantage of interest in its devices globally. Only about 35 percent of its business is now in the United States.

While running a small independent consumer electronics company is a dicey proposition, MacFarlane said Sonos is not interested in selling, as Pure Digital–maker of the Flip digital camera–did to Cisco (CSCO) a year ago for $590 million in stock.

In fact, Santa Barbara, Calif.-based Sonos, which is well known for its innovative top-line (and high-priced) music players, recently moved its business more mainstream with the introduction of the S5 unit in November.

The S5 allows control of the system via an Apple (AAPL) iPhone and only costs $399. (Here is a review of it by The Mossberg Solution’s Katie Boehret.)

The basic idea? A smart speaker paired with a smartphone.

The S5 has been a big seller and has increased product registration–when the software is activated by a user–by five times previous numbers so far, according to the company.

That could get a further boost with the April launch of the iPad, which seems perfect for controller software apps.

“The popularity of the iPhone is great for us,” said MacFarlane. “And we’ll do something great with the iPad.”

It will be nice to have a big score for Volpi, the former Cisco wunderkind. In fact, he invested in one of MacFarlane’s previous start-ups, Software.com, in 1995 when he was in charge of a variety of businesses there.

But the affable Volpi hit a bad patch recently while CEO of a much hyped but ultimately failed video service called Joost. It was that job that landed him in even hotter water.

In the wake of the decline of Joost, which he left to join Index, he was personally sued, along with Index, by its litigious co-founders over Index’s planned investment in Skype, the online telephony service they also co-founded.

Confused? Well, it was confusing.

And not the best start in the investment business for Volpi, after Index pulled out of the high-profile deal in a settlement of the lawsuits.

But, that’s “ancient history,” as Volpi said in the video interview below, which focuses on what’s next.

(News of the Index involvement in Sonos was first reported by TechCrunch earlier this week, though it did not have any details on the amount of funding.)

Although he did not mention the $25 million Sonos funding specifically in the video, Volpi does discuss his bullishness for consumer electronics.

Volpi presumably hopes others share his enthusiasm.

Here’s the video of my interview with him:

]]> http://allthingsd.com/20100312/index-invests-25-million-in-sonos-plus-a-video-interview-with-vc-mike-volpi/feed/ 1 http://allthingsd.com/20100309/cisco-unveils-next-generation-routing-system-to-speed-up-video-on-the-web/ http://allthingsd.com/20100309/cisco-unveils-next-generation-routing-system-to-speed-up-video-on-the-web/#comments Tue, 09 Mar 2010 16:04:53 +0000 Kara Swisher http://kara.allthingsd.com/?p=25210

Cisco today announced a new version of its key routing system, which the networking giant said has a dozen times the traffic capacity of competitors and three times as much as the company’s previous version.

Cisco’s CEO John Chambers said the CRS-3 Carrier Routing System is aimed at the huge growth in video on the Internet, a trend that has also caused slowdowns.

Pankaj Patel, SVP and GM for the service provider business, claimed the system could in just a few minutes deliver all the movies ever made or allow everyone in China to make a video phone call at once.

It had better. The consumption of video online is growing like crazy and a constant bottleneck is likely without some relief.

“Video brings the Internet to life,” said Chambers. “You are moving from a messaging platform to a video platform.”

Along with Chambers and Patel, AT&T (T) Labs CEO and President Keith Cambron was on the call discussing deployment trials the telecom giant has been doing with the CRS-3.

CRS-3 (pictured here) will be available within the calendar year, said the Cisco execs on a press and analyst call this morning.

Cisco had said weeks ago that it was making “a significant announcement that will forever change the Internet and its impact on consumers, businesses and governments.”

Significant? We’ll see, of course. For sure, it was a highly hyped announcement by Chambers.

But due to the speculation about what Cisco was unveiling, its stock hit a 52-week high yesterday. It dropped slightly this morning after the call.

Many others are getting into the high-speed act on the Web.

Google (GOOG) said recently that it is planning on building a superfast broadband service. In addition, the Federal Communications Commission is set to unveil its own ambitious plan to improve high-speed Internet access across the United States.

Cisco has gotten deep into the video business of late, both in pushing its networking gear and in acquiring a video device maker like Pure Digital, the company behind my beloved Flip digital camera.

It is also working on innovative holographic and television-based home telepresence technologies.

Here is a pair of Cisco videos about the CRS-3 and the official press release below them, with all the deets:

Cisco Introduces Foundation for Next-Generation Internet: The Cisco CRS-3 Carrier Routing System

Advanced Platform Designed to Deliver New Wave of Video, Mobile and Data Center/Cloud Services

SAN JOSE, Calif., March 9, 2010–Cisco today announced a major advancement in Internet networking–the Cisco® CRS-3 Carrier Routing System (CRS)–designed to serve as the foundation of the next-generation Internet and set the pace for the astonishing growth of video transmission, mobile devices and new online services through this decade and beyond.

With more than 12 times the traffic capacity of the nearest competing system, the Cisco CRS-3 is designed to transform the broadband communication and entertainment industry by accelerating the delivery of compelling new experiences for consumers, new revenue opportunities for service providers, and new ways to collaborate in the workplace.

Overview:

The Cisco CRS-3 triples the capacity of its predecessor, the Cisco CRS-1 Carrier Routing System, with up to 322 Terabits per second, which enables the entire printed collection of the Library of Congress to be downloaded in just over one second; every man, woman and child in China to make a video call, simultaneously; and every motion picture ever created to be streamed in less than four minutes.

The Cisco CRS-3 enables unified service delivery of Internet and cloud services with service intelligence spanning service provider Internet Protocol Next-Generation Networks (IP NGNs) and data center. The Cisco CRS-3 also provides unprecedented savings with investment protection for the nearly 5,000 Cisco CRS-1 deployed worldwide. Cisco’s cumulative investment in the Cisco CRS family is $1.6 billion, further underscoring the company’s commitment.

AT&T, one of the world’s largest telecommunications companies, recently tested the Cisco CRS-3 in a successful completion of the world’s first field trial of 100-Gigabit backbone network technology, which took place in AT&T’s live network between New Orleans and Miami. The trial advances AT&T’s development of the next generation of backbone network technology that will support the network requirements for the growing number of advanced services offered by AT&T to consumer and business customers, both fixed and mobile.

The Cisco CRS-3 is currently in field trials, and its pricing starts at $90,000 U.S.

Highlights and Capabilities for the Next-Generation Internet:

Unmatched Scale: With a proven multi-chassis architecture, the Cisco CRS-3 can deliver up to 322 tbps of capacity, more than tripling the 92 tbps capacity of the Cisco CRS-1 and representing more than 12 times the capacity of any other core router in the industry.

Unique Core and Data Center/Cloud Services Intelligence: In addition to capacity requirements, the growths of mobile and video applications are creating new multidirectional traffic patterns with the increasing emergence of the data center cloud. The new Cisco Data Center Services System provides tight linkages between the Cisco CRS-3, Cisco Nexus family and Cisco Unified Computing System (UCS) to enable unified service delivery of cloud services. This intelligence also includes carrier-grade IPv6 (CGv6) and core IP/MPLS technologies that permit new IP NGN architectural efficiencies required to keep pace with the rapidly growing cloud services market. Unique capabilities include:

Network Positioning System (NPS)–provides Layers 3 to 7 application information for best path to content, improving consumer and business experiences while reducing costs.

Cloud virtual private network (VPN) for Infrastructure as a Service (IaaS)-enables ‘pay-as-you-go’ for compute, storage and network resources by automating Cisco CRS-3 and Cisco Nexus Inter-Data center connections for Cisco UCS.

Unprecedented Savings: The Cisco CRS-3 offers dramatic operational expense savings and up to 60 percent savings on power consumption compared to competitive platforms. The Cisco CRS-3 also delivers significant capital expenditures savings and investment protection for existing Cisco CRS-1 customers. The new capabilities in the platform can be achieved by reusing the existing chassis, route processors, fans and power systems with the addition of new line cards and fabric. These upgrades can be performed in-service and be provided by Cisco Services to ensure a smooth transition.

Silicon Innovation: The Cisco CRS-3 is powered by the new Cisco QuantumFlow Array Processor, which unifies the combined power of six chips to work as one, enabling unprecedented levels of service capabilities and processing power. Making this implementation even more unique is its ability to deliver capabilities with a fraction of the power required by lesser performing chipsets. The Cisco QuantumFlow Array chipset was designed to provide the new system the ability to scale with the ever increasing demands being placed on the IP NGN by the many different applications and billions of devices being used by both businesses and consumers in the Zettabyte era.

Supporting Quotes:

Keith Cambron, president and CEO, AT&T Labs

“We are entering the next stage of global communication and entertainment services and applications, which requires a new set of advanced Internet networking technologies. AT&T’s network handled 40 percent more traffic in 2009 than it did in the previous year, and we continue to see this growth in 2010. Having leading edge experience in managing the largest global data network, we are pleased to continue our close working relationship with Cisco and its groundbreaking Cisco CRS-3 platform.”

Pankaj Patel, senior vice president and general manager, Service Provider Business, Cisco

“The next generation Internet is upon us and we are confident that the Cisco CRS-3 will play a crucial role as service providers like AT&T deliver an exciting, new array of video, mobile, data center and cloud services. The Cisco CRS-3 is well positioned to carry on the tradition of the Cisco CRS-1, become the flagship router of the future and serves as the foundation for the world’s most intelligent and advanced broadband networks.”

]]> http://allthingsd.com/20100309/cisco-unveils-next-generation-routing-system-to-speed-up-video-on-the-web/feed/ 3 http://allthingsd.com/20100309/what-is-cisco-announcing-this-morning-to-forever-change-the-internet-a-foursquare-enabled-jet-pack/ http://allthingsd.com/20100309/what-is-cisco-announcing-this-morning-to-forever-change-the-internet-a-foursquare-enabled-jet-pack/#comments Tue, 09 Mar 2010 13:15:53 +0000 Kara Swisher http://kara.allthingsd.com/?p=25193

Bright and early this morning at 8 am PT, BoomTown will be jacked into the matrix for an invitation-only media and analyst briefing to hear exactly what the heck Cisco (CSCO) has been yammering on about of late.

Last month, the networking giant said in a mysterioso email that it would be making “a significant announcement that will forever change the Internet and its impact on consumers, businesses and governments.”

Significant? Forever? It had better be good.

Like a jet pack from which you can communicate your Foursquare location (“I’m Mayor of the Clouds!”).

Or perhaps a chip you can implant in your head that will give you live updates of every single Apple (AAPL) iPad rumor.

Or a cogent explanation of how to extricate yourself from Google Buzz.

Or, at long last, maybe Cisco has figured out a way to fix the dropped calls crisis on the AT&T (T) mobile network–a tech solution I would nominate for a Nobel Prize if it ever came to pass.

In all seriousness, due to the speculation around what Cisco will unveil, its stock hit a 52-week high yesterday–up 92 cents, or 3.7 percent, to $26.13–and analysts were speculating on what the company will say.

The consensus: A new router to improve–please, oh Lord, please–wireless transmission of Web video and heavy data that often slow mobile and ISP networks.

It’s part of a new focus on the ever-growing but ever-slowing wireless data networks.

Google (GOOG) said recently that it was planning to build a superspeedy broadband service. In addition, the Federal Communications Commission is set to unveil its own ambitious plan to improve high-speed Internet access across the United States.

Well, it’ll be good, since the consumption of video online is growing like crazy and a constant bottleneck is likely without some relief.

Cisco has gotten deep into video of late, both in pushing networking gear and in acquiring video device maker like Pure Digital, the company behind my beloved Flip digital camera.

It is also working on innovative holographic and television-based home telepresence technologies.

So, is it too much to ask Cisco for a simple jet pack that works? I think not!

]]> http://allthingsd.com/20100309/what-is-cisco-announcing-this-morning-to-forever-change-the-internet-a-foursquare-enabled-jet-pack/feed/ 4 http://allthingsd.com/20091013/cisco-swallows-starent/ http://allthingsd.com/20091013/cisco-swallows-starent/#comments Tue, 13 Oct 2009 16:00:30 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=26540

]]> http://allthingsd.com/20091013/cisco-swallows-starent/feed/ 0 http://allthingsd.com/20091013/cisco-buying-starent-for-2-9-billion/ http://allthingsd.com/20091013/cisco-buying-starent-for-2-9-billion/#comments Tue, 13 Oct 2009 13:26:51 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=26506 Cisco CEO John Chambers wasn’t kidding when he said we’d see the company move into a number of new markets via acquisition over the next year.

Earlier this year, Cisco (CSCO) acquired Pure Digital, developer of the Flip video camera, for $590 million. Two weeks ago, the company spent $3 billion on videoconferencing system maker Tandberg. And now it’s purchasing wireless infrastructure outfit Starent Networks (STAR) for $2.9 billion, or $35 a share. That’s a 21 percent premium over Starent’s closing price on Monday of $29.03, but it’s likely money well spent for Cisco.

Starent makes hardware and software to support wireless multimedia services, an obvious sweet spot in the data services market right now. Indeed, Cisco expects global mobile data traffic to more than double every year through 2013. Which makes Starent a pretty good growth bet, from on acquisition standpoint.

]]> http://allthingsd.com/20091013/cisco-buying-starent-for-2-9-billion/feed/ 0 http://allthingsd.com/20090723/apple-to-flip-off-cisco-with-new-ipods/ http://allthingsd.com/20090723/apple-to-flip-off-cisco-with-new-ipods/#comments Thu, 23 Jul 2009 19:53:35 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=21993 Cisco’s acquisition of Pure Digital, developer of the Flip digital video camera, may prove an ill-timed one. For while the Flip currently dominates the market that it largely created, it’s about to be taken to the mat by a new and formidable rival: Apple.

In a research note issued this week, Canaccord analyst Peter Misek speculates that Apple (AAPL), which recently debuted an iPhone capable of shooting and editing video, plans to bring the same functionality to the iPod.

“We believe Apple is now targeting to enter the low-end camcorder market by adding this functionality into its iPod lineup,” he writes. “…We believe Apple will unveil various iPod versions with camcorder functionality. We believe this will drive sales not only for traditional MP3 players, but as a new competitive dynamic to the lower end camcorder market that is now dominated by Flip line of digital camcorders.”

Misek sees such a move giving a nice boost to iPod sales, which, as Apple revealed earlier this week, have been declining a bit. “On anticipation of this we have markedly raised our iPod growth assumptions and have raised our iPod shipment forecast from 50 million to 65 million units.”

And what of Cisco (CSCO)? What would the transformation of the iPod into a point-and-shoot camcorder mean for the Flip? Certainly not good things. Who’d want to carry two devices for music and video capture when they could carry just one?

]]> http://allthingsd.com/20090723/apple-to-flip-off-cisco-with-new-ipods/feed/ 1 http://allthingsd.com/20090707/the-duck-call-stylings-of-ciscos-john-chambers-no-really-duck-calls/ http://allthingsd.com/20090707/the-duck-call-stylings-of-ciscos-john-chambers-no-really-duck-calls/#comments Wed, 08 Jul 2009 01:34:53 +0000 Kara Swisher http://kara.allthingsd.com/?p=15514

What hath the Flip digital video camera wrought?

Well, for one, getting to see a major Silicon Valley tech exec do duck calls online, that’s what.

Cisco (CSCO) PR guy John Earnhardt, who is obviously studying technique from BoomTown’s shaky-cam video style, caught company CEO and Chairman John Chambers quacking away in his office.

And, of course, he then proceeded to capture the moment on the popular digital video recorder, which was made by the small and innovative San Francisco-based Pure Digital that Cisco bought for $590 million in March.

Wrote Earnhardt on the company blog:

“I was sitting at my desk a few minutes ago when I heard a duck call echoing down the corridor. Then, that inimitable John Chambers laughter. With my trusty Flip Mino HD video camera in hand I strolled into Chambers office to capture the duck call for you, our loyal readers. His lesson was brief, but it is very clear that he is a man of many talents.”

Well, that’s the Cisco PR spin on it, at least! (My spin: Chambers is one wacky dude.)

Cisco is now calling for duck call competitors to challenge Chambers on its blog or at its PR YouTube channel.

The best duck call gets a free Flip Mino CD from Chambers.

Here’s the video of Chambers in Daffy Duck mode (and below it is the full video of the demo that Pure Digital did at this year’s seventh D: All Things Digital conference):

]]> http://allthingsd.com/20090707/the-duck-call-stylings-of-ciscos-john-chambers-no-really-duck-calls/feed/ 1 http://allthingsd.com/20090615/2220/ http://allthingsd.com/20090615/2220/#comments Mon, 15 Jun 2009 17:23:35 +0000 Beth Callaghan http://d7.allthingsd.com/?p=2220

Continuing our posting of the full sessions, in the order of their presentation at the D: All Things Digital conference in late May, here is the demo by Pure Digital, maker of the Flip digital camera.

Which is, as many readers of this column know, a key BoomTown accessory–with which Kara makes her wobbly videos annoying various tech mandarins in interviews.

San Francisco-based Pure Digital debuted its first innovative Flip at a previous D conference and was recently sold to Cisco (CSCO).

This time, CEO Jonathan Kaplan showed off new personal “channels” that allow you to share videos with others, like friends and family.

Here’s the full video of the Pure Digital demo at D7:

]]> http://allthingsd.com/20090615/2220/feed/ 0 http://allthingsd.com/20090615/pure-digital-the-full-d7-demo/ http://allthingsd.com/20090615/pure-digital-the-full-d7-demo/#comments Mon, 15 Jun 2009 14:59:22 +0000 Kara Swisher http://kara.allthingsd.com/?p=14487

Continuing our posting of the full sessions, in the order of their presentation at the D: All Things Digital conference in late May, here is the demo by Pure Digital, maker of the Flip digital camera.

Which is, as many readers of this column know, a key BoomTown accessory–with which I make my wobbly videos annoying various tech mandarins in interviews.

San Francisco-based Pure Digital debuted its first innovative Flip at a previous D conference and was recently sold to Cisco (CSCO).

This time, CEO Jonathan Kaplan showed off new personal “channels” that allow you to share videos with others, like friends and family.

Here’s the full video of the Pure Digital demo at D7:

]]> http://allthingsd.com/20090615/pure-digital-the-full-d7-demo/feed/ 0 http://allthingsd.com/20090527/d7-video-pure-digital-demo/ http://allthingsd.com/20090527/d7-video-pure-digital-demo/#comments Wed, 27 May 2009 17:37:23 +0000 Beth Callaghan http://d7.allthingsd.com/?p=1175 Pure Digital, which debuted its Flip camera at D3, is back this year with something new: personal channels for sharing video content among friends and family which can also be viewed on a range of media devices.

]]> http://allthingsd.com/20090527/d7-video-pure-digital-demo/feed/ 0 http://allthingsd.com/20090527/d7-tech-demo-pure-digital/ http://allthingsd.com/20090527/d7-tech-demo-pure-digital/#comments Wed, 27 May 2009 17:32:44 +0000 Oliver J. Chiang http://d7.allthingsd.com/?p=501

During this demo, Pure Digital, maker of the Flip digital camcorder (which debuted at a previous D conference, incidentally), will launch its newest feature: personal “channels” that allow you to share videos with others, like friends and family. These channels can be viewed across various media devices: Mac, PC, iPhone and television sets. The feature also allows share-ees to watch the shared video on their own time or for all parties to schedule a shared viewing time.

Demo Highlights

Live Blog

• Introduction: Walt and Kara welcome the Pure Digital guys, CEO Jonathan Kaplan and VP of Marketing Simon Fleming-Wood, to the stage. Hey, attendees all have a Flip MinoHD in their swag bag! Yay!
• Kaplan: Starts demoing with his Flip. “We set out to make sharing easy and fun.” It’s still kind of hard to share, compared to uploading or emailing. Flip Channels is debuting in June.
• This is a free service. Kaplan shows what the channel does: Create a channel, share it with a person or a group of people. You can receive those channels everywhere–computers, TVs. Nifty! Ooh, and we have our very own D7 channel
• Kaplan: Tell me of your new shared video by any social-networking channel. The channel is a Web site: FlipShare.com. Kaplan plays a sample video, where several Boston Red Sox players say hi to Kara and Walt.
• Kara: I’m kind of pissed you didn’t get the stars of “Gossip Girl” on that….
• Kaplan demos FlipShare on the iPhone. Look! so many shiny channels. Even a D7 one. They show a live video they just took at the conference.
• Theme of the moment: It’s so easy to make these channels.
• Walt: How is that different from, say, YouTube channels?
• Kaplan: Ease of use, mon ami, ease of use. You can decide who is/isn’t in your channel. More fancy permission-setting.
• Fleming-Wood: See the thing is, it’s really easy to share with our channel. And it comes on the TV too. We’re making an app–whoops, box–for that. Living room access is what it’s about. He shows the Bosox video again with all the regretful players saying it was unfortunate they couldn’t make it to D7. Totally!
• Kaplan: This could go wireless. Walt: How dangerous does this make Swisher? Audience Laughs.
• They talk price and equipment. Walt and Kara thank Pure Digital.

• 
• 
• 
• 
• 
• 

]]> http://allthingsd.com/20090527/d7-tech-demo-pure-digital/feed/ 0 http://allthingsd.com/20090504/welcome-to-lucky-d7-still-gambling-on-the-digital-future/ http://allthingsd.com/20090504/welcome-to-lucky-d7-still-gambling-on-the-digital-future/#comments Mon, 04 May 2009 07:26:10 +0000 Kara Swisher http://d7.allthingsd.com/?p=126

Incredibly, this is the seventh year of the D: All Things Digital conference.

We feel very lucky to get here, especially in the midst of what our own site’s Digital Daily scribe, John Paczkowski, has so perfectly dubbed the “econalypse.”

Ironically, Walt Mossberg and I planned to launch the very first conference in the middle of the last major downturn for tech, in 2001. But, in the carnage of the Web 1.0 meltdown, we actually held off for two years, with our first D gathering taking place in 2003.

It’s been a real winning streak since then for D, due in large part to our great speakers–such as Microsoft (MSFT) icon Bill Gates and Apple (AAPL) legend Steve Jobs.

Both have been onstage many times over the years, including a historic interview the pair of tech titans did together in 2007 at D5.

Other amazing speakers have included: Howard Stringer of Sony (SNE), Barry Diller of InterActiveCorp (IACI), legendary director George Lucas, Time Warner (TWX) CEO Jeff Bewkes, Jeff Bezos of Amazon (AMZN), former eBay (EBAY) CEO Meg Whitman, News Corp. (NWS) head Rupert Murdoch, Microsoft head Steve Ballmer, Walt Disney (DIS) honcho Bob Iger, Bobby Kotick of Activision Blizzard (ATVI), CBS (CBS) CEO Les Moonves, Democratic and Republican pols like former Vice President Al Gore and Sen. John McCain, all the leadership of Google (GOOG) and many, many more.

We have had a lot of great moments onstage with all these tech and media players over the years, to be sure, with interviews ranging from the funny to the sublime to the truly disastrous.

But, like the digital industry and the innovation our conference focuses on, we also like to lean forward to try to figure out what the Next Big Thing is around the corner, whether it comes from Silicon Valley or not.

That’s why we’re kicking off our conference on May 26 with two of the founders of Twitter–Biz Stone and Evan Williams–who are riding high on tech’s latest hot thing, which might turn out to be either a rocket ship or a shooting star.

They’ll be followed up over the next two days by a plethora of interesting players, from the leaders of several major mobile companies to content execs hit hard by fast-moving digital forces to a new Internet leader like Yahoo (YHOO) CEO Carol Bartz, who is trying to turn around one of the Web’s great icons from its more recent lackluster path.

And, as we always do, we will be featuring a spate of demos too, trying to see if we can unearth that next next thing.

In the past, the D stage has seen the debut of start-up products like Sling Media’s Slingbox, Aliph’s Jawbone and Pure Digital’s Flip, all of which have gone onto glory. And also some, like Palm’s Foleo, which did not.

While not everyone can attend D, our crack staff is committed to bringing all the action from this year’s conference to readers of the All Things Digital site via up-to-the-minute blogs, photos, videos, tweets, digs and more. We’ll also, as soon as we can, post the videos of each of the onstage sessions, in their entirety.

Until it all kicks off, here is the list of speakers, below, in alphabetical order, who will be appearing at 2009′s D7 conference:

Irving Azoff | CEO of Ticketmaster Entertainment (TKTM)

Mitchell Baker | Chairman of Mozilla

Steve Ballmer | CEO of Microsoft

Carol Bartz | CEO of Yahoo

Mark Cuban | Chairman of HDNet and Owner of the Dallas Mavericks, Landmark Theaters and Magnolia Pictures

Eve Ensler | Playwright and Founder of V-Day

Arianna Huffington | Editor-in-Chief of the Huffington Post

Olli-Pekka Kallasvuo | CEO of Nokia (NOK)

Mike Lazaridis | Co-CEO of Research In Motion (RIMM)

John Lilly | CEO of Mozilla

John Malone | Chairman of Liberty Media Corporation (LCAPA)

Roger McNamee | Partner, Elevation Partners

Jon Miller | Chief Digital Officer of News Corp.

Jon Rubinstein | Executive Chairman, Palm (PALM)

Randall Stephenson | CEO of AT&T (T)

Biz Stone | Co-founder of Twitter

Owen Van Natta | CEO of MySpace

Katharine Weymouth | Publisher of the Washington Post (WPO)

Evan Williams | Co-founder and CEO of Twitter

Jeff Zucker | CEO of NBC Universal (GE)

]]> http://allthingsd.com/20090504/welcome-to-lucky-d7-still-gambling-on-the-digital-future/feed/ 0 http://allthingsd.com/20090504/welcome-to-lucky-d7-gambling-on-the-future-of-tech/ http://allthingsd.com/20090504/welcome-to-lucky-d7-gambling-on-the-future-of-tech/#comments Mon, 04 May 2009 07:15:55 +0000 Kara Swisher http://kara.allthingsd.com/?p=13080

Incredibly, this is the seventh year of the D: All Things Digital conference.

We feel very lucky to get here, especially in the midst of what our own site’s Digital Daily scribe, John Paczkowski, has so perfectly dubbed the “econalypse.”

Ironically, Walt Mossberg and I planned to launch the very first conference in the middle of the last major downturn for tech, in 2001. But, in the carnage of the Web 1.0 meltdown, we actually held off for two years, with our first D gathering taking place in 2003.

It’s been a real winning streak since then for D, due in large part to our great speakers–such as Microsoft (MSFT) icon Bill Gates and Apple (AAPL) legend Steve Jobs.

Both have been onstage many times over the years, including a historic interview the pair of tech titans did together in 2007 at D5.

Other amazing speakers have included: Howard Stringer of Sony (SNE), Barry Diller of InterActiveCorp (IACI), legendary director George Lucas, Time Warner (TWX) CEO Jeff Bewkes, Jeff Bezos of Amazon (AMZN), former eBay (EBAY) CEO Meg Whitman, News Corp. (NWS) head Rupert Murdoch, Microsoft head Steve Ballmer, Walt Disney (DIS) honcho Bob Iger, Bobby Kotick of Activision Blizzard (ATVI), CBS (CBS) CEO Les Moonves, Democratic and Republican pols like former Vice President Al Gore and Sen. John McCain, all the leadership of Google (GOOG) and many, many more.

We have had a lot of great moments onstage with all these tech and media players over the years, to be sure, with interviews ranging from the funny to the sublime to the truly disastrous.

But, like the digital industry and the innovation our conference focuses on, we also like to lean forward to try to figure out what the Next Big Thing is around the corner, whether it comes from Silicon Valley or not.

That’s why we’re kicking off our conference on May 26 with two of the founders of Twitter–Biz Stone and Evan Williams–who are riding high on tech’s latest hot thing, which might turn out to be either a rocket ship or a shooting star.

They’ll be followed up over the next two days by a plethora of interesting players, from the leaders of several major mobile companies to content execs hit hard by fast-moving digital forces to a new Internet leader like Yahoo (YHOO) CEO Carol Bartz, who is trying to turn around one of the Web’s great icons from its more recent lackluster path.

And, as we always do, we will be featuring a spate of demos too, trying to see if we can unearth that next next thing.

In the past, the D stage has seen the debut of start-up products like Sling Media’s Slingbox, Aliph’s Jawbone and Pure Digital’s Flip, all of which have gone onto glory. And also some, like Palm’s Foleo, which did not.

While not everyone can attend D, our crack staff is committed to bringing all the action from this year’s conference to readers of the All Things Digital site via up-to-the-minute blogs, photos, videos, tweets, digs and more. We’ll also, as soon as we can, post the videos of each of the onstage sessions, in their entirety.

Until it all kicks off, here is the list of speakers, below, in alphabetical order, who will be appearing at 2009′s D7 conference:

Irving Azoff | CEO of Ticketmaster Entertainment (TKTM)

Mitchell Baker | Chairman of Mozilla

Steve Ballmer | CEO of Microsoft

Carol Bartz | CEO of Yahoo

Mark Cuban | Chairman of HDNet and Owner of the Dallas Mavericks, Landmark Theaters and Magnolia Pictures

Eve Ensler | Playwright and Founder of V-Day

Arianna Huffington | Editor-in-Chief of the Huffington Post

Olli-Pekka Kallasvuo | CEO of Nokia (NOK)

Mike Lazaridis | Co-CEO of Research In Motion (RIMM)

John Lilly | CEO of Mozilla

John Malone | Chairman of Liberty Media Corporation (LCAPA)

Roger McNamee | Partner, Elevation Partners

Jon Miller | Chief Digital Officer of News Corp.

Jon Rubinstein | Executive Chairman, Palm (PALM)

Randall Stephenson | CEO of AT&T (T)

Biz Stone | Co-founder of Twitter

Owen Van Natta | CEO of MySpace

Katharine Weymouth | Publisher of the Washington Post (WPO)

Evan Williams | Co-founder and CEO of Twitter

Jeff Zucker | CEO of NBC Universal (GE)

]]> http://allthingsd.com/20090504/welcome-to-lucky-d7-gambling-on-the-future-of-tech/feed/ 1 http://allthingsd.com/20090406/pure-digitals-jonathan-kaplan-aka-the-flip-guy-speaks-post-cisco/ http://allthingsd.com/20090406/pure-digitals-jonathan-kaplan-aka-the-flip-guy-speaks-post-cisco/#comments Mon, 06 Apr 2009 17:52:02 +0000 Kara Swisher http://kara.allthingsd.com/?p=11772

BoomTown has been an unabashed fan of Pure Digital’s Flip digital video cameras since we debuted them at the D: All Things Digital conference in 2005.

And I have used the nifty device on this site since for my shaky-tastic video extravaganzas.

Yes, Pure Digital’s CEO Jonathan Kaplan (pictured above) is to blame!

Now, Kaplan has gone and sold Flip off to Cisco (CSCO) for $590 million in stock.

Sources said that Pure Digital–this corporate name will go by the wayside, by the way–had also chittered-chatted with Sony (SNE) and Hewlett-Packard (HPQ) about such a possibility.

That’s pretty good company for Pure Digital, considering it started as a white-label product, shrink-wrapped for theme parks and drugstores.

But the simplicity of its line of relatively inexpensive cameras, including the recently released Mino (seen below, and also sold in a high-definition version), has made it a huge consumer success, which is no easy task in the devices arena.

With Flip software, a user can plug the unit into a USB port of a computer to upload digital video easily. Flip models cost anywhere from $100 to $299.

Spot-on simplicity and a no-brainer feel have made them into the most popular such devices around, and in a very short time.

But, although it got $68.2 million in funding since its founding in 2001, taking all that innovation and success and truly turning it into a global brand was a much longer and more expensive slog for the San Francisco start-up.

Hence, a sale to the bigs.

Pure Digital is probably a good fit for Cisco, which has been trying to turbocharge its consumer-focused business, especially in home networking, and the move is a clear step in that direction.

In the integration, Cisco has made the Flip team part of ypuCisco’s Consumer Business group, and Kaplan will become general manager of the combined organization.

What comes next for Flip could be interesting, including the addition of social-networking and streaming features, which would dovetail well with Cisco’s other investments in consumer networking.

But most of all, it’s a nice ending to a very sharp company that makes a great product. Introducing a new consumer electronics device into the world is no small task and, clearly, Flip deserves the much bigger stage it is set to get.

Here’s my video interview with Kaplan, about Flip’s history and future:

]]> http://allthingsd.com/20090406/pure-digitals-jonathan-kaplan-aka-the-flip-guy-speaks-post-cisco/feed/ 1 http://allthingsd.com/20090321/weekend-update-32109-march-madness-edition/ http://allthingsd.com/20090321/weekend-update-32109-march-madness-edition/#comments Sun, 22 Mar 2009 00:10:23 +0000 Beth Callaghan http://digitaldaily.allthingsd.com/?p=15156 Technically, the term refers to the frenzied flow of games and the intensity of the contenders for the NCAA Championship crown. But the NCAA doesn’t have a corner on “March Madness”–those descriptors work well in other instances, too. To wit:

BoomTown posted from various spots in Europe this week, yet managed to follow the geek-tastic goodness of Silicon Valley’s own contender, Apple (AAPL) co-founder Steve Wozniak, who competed while injured this week on “Dancing With the Stars”–and escaped elimination via the love of viewers in Silicon Valley and elsewhere. Another founder made the headlines this week–BoomTown noted that Steve Case appeared at a huge pep rally at Time Warner’s (TWX) AOL. Case and former AOL exec Ted Leonsis gave their support (and a lucky green tie) to new CEO Tim Armstrong. Elsewhere, Pure Digital, the maker of BoomTown’s favorite gadget–the ever-present Flip digital video camera–sold itself to Cisco (CSCO) for $590 million in stock, and BoomTown urged Silicon Valley to remember it’s not immune to the recession, to put its nose to the grindstone and to avoid party-hearty inanity.

Guess no one’s taking heed of the warning, though: MediaMemo reports that no one’s getting anything done at work–CBS (CBS) says its March Madness Web traffic is up 57 percent compared to last year. On top of that, television viewership rose various percentages throughout the week. MM wasn’t watching much basketball this week, though–there was plenty to blog about: The New York Times (NYT) cracked down on unauthorized use of its photos; Discovery Communications (DISCA) announced a patent infringement suit against Amazon and its Kindle Reader; Palm (PALM) delivered dismal third quarter results, putting even greater pressure on the success of the Pre; and in a Q&A with BusinessWeek editor Stephen Adler, Steve Ballmer said he’s open to a phone call from Yahoo (YHOO) CEO Carol Bartz whenever she’s ready to talk. Oh, and in case you were wondering what happened at SXSW, MediaMemo got a Google (GOOG) guy to explain it.

Digital Daily’s March Madness started with a liveblog of Apple’s St. Patrick’s Day press event to unveil version 3.0 of its iPhone OS, a chronicle of the myriad features displayed onstage and a live photoblog to back it up. DD noted that sales of the iPod touch and iPhone have outstripped RIM’s (RIMM) combined BlackBerry sales by a factor of… well, by a LOT. Kind of supports the data that say mobile Web use doubled over the last year. Which is good, because Mac sales were no good in February.

In Personal Technology, Walt Mossberg reviewed the latest release of Microsoft IE8 (MSFT), its most comprehensive release in many years. His verdict? Mixed, of course. In Mossberg’s Mailbox, Walt talked to readers about the many models of BlackBerry phones and how they differ from one another, the new iPod shuffle and its earphone compatibility and upgrading Vista to Windows 7. In the Mossberg Solution, Katie Boehret reviewed the Ee Top, Asus’s first foray into the all-in-one PC market.

More next week. Go Woz!

]]> http://allthingsd.com/20090321/weekend-update-32109-march-madness-edition/feed/ 0 http://allthingsd.com/20090319/flip-flips-to-cisco-for-590-million-in-stock/ http://allthingsd.com/20090319/flip-flips-to-cisco-for-590-million-in-stock/#comments Thu, 19 Mar 2009 13:15:04 +0000 Kara Swisher http://kara.allthingsd.com/?p=11090

Pure Digital, the maker of the popular Flip digital video cameras, has sold itself to Cisco (CSCO) for $590 million in stock.

The deal, which had been rumored last week by TechCrunch, was announced this morning by Cisco.

The innovative San Francisco-based start-up has made it big from its modest roots as a white-label digital video camera shrink-wrapped for themes parks and drug stores.

But the simplicity of its line of relatively inexpensive cameras, including the recently released Mino HD, has made it a huge consumer success, which is no easy task in the devices arena.

Using its own software, a user can plug the Flip into a USB port of computer to upload digital video easily. Flip models cost anywhere from $100 to $299.

Cisco has been trying to turbocharge its consumer-focused business, especially in home networking, and the move is a clear step in that direction. It is better known for its business making hardware and software that powers the plumbing of the Web.

Although it used stock in buying Pure Digital, Cisco has a $29 billion pile of cash. Recently, I wrote a piece about how a lot of tech companies, with big hordes of money, will soon be buying up a lot of the most promising tech start-ups.

The first commercially-branded Flips were, in fact, introduced at the third D: All Things Digital conference in 2005 by CEO Jonathan Kaplan (pictured here at D3.)

In an email to BoomTown this morning, Kaplan was happy with the outcome, because no matter its success, taking Flip to the next level is not easy:

“We’re thrilled by the partnership. Cisco shares my vision for capturing and sharing simple, accessible, and high-quality video to the mass-market consumer. Now we can deliver that ideal on a global basis.”

Cisco said that “upon the close of the acquisition, the Pure Digital team will become part of Cisco’s Consumer Business Group, which includes Linksys® by Cisco® home networking, audio and media-storage products. Kaplan will become general manager of the combined organization,” reporting to Ned Hooper, SVP of Corporate Development and Consumer Groups.

He and his team will also get a $15 million in retention-based equity incentives.

The sale to Cisco is a big win financially overall. Pure Digital got another $40 million in additional funding in mid-2007, from investors Morgan Stanley Principal Investment, Heights Capital Management and AllianceBernstein, who joined initial investors Sequoia Capital and Benchmark Capital.

It had previously gotten $28 million in 2004 from Sequoia and Benchmark, as well as Crescendo Ventures, Steamboat Ventures and Focus Ventures. It was founded with $200,000 in seed funding in 2001.

And, more to the point, Flip cameras have been used by me for nefarious interviewing of scared Web execs since our site’s launch. In fact, I have been so bizarrely enamored with the Flip that I even did a video of my many old Flips meeting the new high-definition Mino last November.

Here is that Felliniesque effort:

And here’s the full press release from Cisco about the deal:

Cisco Announces Intent to Acquire Pure Digital Technologies, Makers of Flip VideoTM Networking Leader Adds Popular Flip Video Solutions to Consumer Portfolio Photos

SAN JOSE, Calif.–March. 19, 2009–Cisco today announced its intent to acquire privately held Pure Digital Technologies Inc. San Francisco-based Pure Digital, creator of the best-selling Flip VideoTM brand, is a pioneer in developing consumer-friendly video solutions with mass-market appeal.

“The acquisition of Pure Digital is key to Cisco’s strategy to expand our momentum in the media-enabled home and to capture the consumer market transition to visual networking,” said Ned Hooper, senior vice president of Cisco’s Corporate Development and Consumer Groups. “Pure Digital has revolutionized the way people capture and share video with Flip Video. This acquisition will take Cisco’s consumer business to the next level as the company develops new video capabilities and drives the next generation of entertainment and communication experiences.”

Pure Digital’s Flip Video has sold more than 2 million units and quickly demonstrated market appeal in the United States by making video simple, accessible and fun. All Flip Video products come equipped with FlipShare, a best-in-class software that allows users to easily organize and edit videos and then share them instantly on YouTube, MySpace and other popular sharing Web sites.

“Flip Video puts the power to instantly capture, edit and share video into the hands of everyday consumers,” said Jonathan Kaplan, chairman and CEO of Pure Digital. “By combining forces with Cisco, we join a company that shares our passion for video and whose global scale and tremendous technology expertise we expect will enable us to quickly expand and enrich the Flip Video experience.”

Upon the close of the acquisition, the Pure Digital team will become part of Cisco’s Consumer Business Group, which includes Linksys® by Cisco® home networking, audio and media-storage products. Kaplan will become general manager of the combined organization, reporting to Hooper.

The Pure Digital acquisition exemplifies Cisco’s “build, buy and partner” innovation strategy to move quickly into new markets and capture key market transitions. Under the terms of the agreement, Cisco will pay approximately $590 million in stock in exchange for all shares of Pure Digital. In addition, Cisco will provide up to $15 million in retention-based equity incentives for continuing employees. The acquisition is subject to various standard closing conditions and is expected to close in the fourth quarter of Cisco’s fiscal year 2009. The acquisition will be accounted for in accordance with generally accepted accounting principles.

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