1/20/2004 -- Cisco Systems Inc. doesn't have a big presence in the digital video networking space, but that could change now that Cisco's shipping new video gateways designed to leverage the strengths of its Gigabit Ethernet switching solutions.

Cisco recently unveiled two new video gateways designed to let cable operators tap Cisco Gigabit Ethernet-based networks to deliver video-on-demand (VoD) services to customers. The new products are part of Cisco's digital video quadrature amplitude modulation (QAM) line and consist of the Cisco uMG9820 QAM gateway, a standalone device, and the Cisco uMG9850 QAM Module.

The new products mark the second phase in Cisco's Next Generation Digital Video Network strategy, which the networking giant kicked off last year by touting its assets in Gigabit Ethernet switching and integrated transport capabilities. Ron Westfall, a principal analyst of broadband infrastructure with research firm Current Analysis Inc., says that although there are quite a few players in the VOD market, Cisco's strengths in IP switching help to differentiate it from competitors who are often coming from the opposite -- i.e., broadband-centric -- perspective. "What this announcement does is emphasize how Cisco is optimized for a video-on-demand architecture, particularly when this comes with its traditional strength in Gigabit Ethernet [switching]."

In some cases, Cisco representatives say, cable operators today are daisy-chaining QAM devices together to exploit the full capacity of their Gigabit Ethernet links. In contrast, Cisco says that its new VoD products exploit the full capacity of Gigabit Ethernet links to support a maximum of 240 standard-definition video streams per device.

Cisco's uMG9820 QAM Gateway is targeted for smaller deployments, while the uMG9850 snaps into Cisco's Catalyst 4500 series switches and can be deployed in mixed IP and QAM architectures. Cisco's Catalyst 4506 and Catalyst 4507R switches can support up to five Cisco uMG9850 QAM modules for a maximum of 120 QAM channels, which enable cable operators to process up to 1200 digital video streams in one device.

Current Analysis' Westfall says that Cisco's new video gateway products are competitive with products from specialty providers such as BitBand Technologies Ltd. and Harmonic Inc. "These are delivering clearly differentiated technology from rival technology out there," he argues, acknowledging that competitors such as Harmonic also market similar devices designed to function as gateways between IP networks and QAM channels.

"Cisco can reasonably assert that they can pack in a lot more QAM channels into the same footprint, as opposed to the Harmonic technology, which is the most directly comparable competitor," Wesftall argues.

He expects that Cisco will continued to be competitive in a cable market that accounted for nearly $11 billion in capital expenditures last year. "Cisco clearly had a strategic interest in the North American cable operator market, and that includes a foothold in the cable modem termination system segment for example," he points out. "They've invested a lot of R&D in becoming a voice-over-IP provider for the cable providers, as well." -Stephen Swoyer