Do We Need More Service Providers?

Crunch - well, both TechCrunch and CrunchGear - reported today (Good Morning Silicon Valley has a great article as well) that Cisco Systems has recently acquired Arroyo Systems and Scientific Atlanta in order to develop Video-On-Demand services.

Cisco, a networking giant that makes very unsexy gear, also acquired Scientific-Atlanta and is working on both software and hardware for the series of tubes that will soon carry on-demand PR()N to all of our homes and businesses.

The major problems we’re facing right now are bandwidth issues and compression speed. Cisco’s efforts should streamline the process a bit and actually build a lot of the heavy lifting right into the hardware.

On the surface, this seems like just another major tech company trying to get into the on-demand game. Cisco seems to be in a very unique position to do this, but what kind of part would they play? It wouldn't seem like they would be a service provider, actually providing content to consumers.

Hopefully, content providers could spring up to take advantage of Cisco's VoD platform. Netflix/Tivo would not want to create the hardware involved with VoD delivery, and could potentially use what Cisco creates. Or maybe companies like YouTube could push their content (and communities) to the boxes!