The BroadWare deal, while small in dollars, highlights the rising demand for companies that make video surveillance gear. Driving that trend is the confluence of homeland security concerns in the U.S. and the spread of sophisticated security networks based on Internet technologies.
In 2006, for example, following the lead of London and other cities around the world that use high-tech tools to monitor vital infrastructure, New York’s Metropolitan Transit Authority signed a $212 million contract with Lockheed Martin for the defense contractor to develop a video surveillance system to monitor the city’s subways, bridges and tunnels. Other cities, such as Cleveland, Dallas and Akron, Ohio, plan similar projects.
Such demand has caught the attention not only of Cisco, but also of other tech giants such as IBM, Hewlett-Packard and EMC, which are expected to make acquisitions to delve into the video surveillance market.
“We’re going to see more (mergers and acquisitions) from the likes of IBM and Cisco,” said Dilip Sarangan, a research analyst with Frost & Sullivan, a San Antonio, Texas-based technology consulting firm. “A lot of the previous M&A activity has been from traditional security players, but now it’s a growth market for information technology firms.” In 2006, venture capitalists and other investors poured $100 million into late-stage video surveillance technology companies. Experts think the market is ready for consolidation.
Source: CNET News.com