Cisco’s Grand Video Plan

Having determined that its growth in the enterprise has pretty much stalled, Cisco (s CSCO) is looking at video to help it sell equipment to carriers. To do that it’s positioning video traffic as the new data — ready to take over the web. Because if you’re going to convince service providers to shell out for equipment that can process 6.4 terabytes of data per second, by golly, there needs to be 6 terabytes of traffic to handle. Video files are fat enough to make that threat a reality.

For Cisco, all video — from teleconferencing to cable — is the answer to its growth problem. Its executives anticipate video adding up to $20 billion to the equipment maker’s bottom line. Cisco is betting that cable operators and carriers panicked by the rise of video content are going to start building their own optimized video networks that Cisco calls a medianet. The company believes that others, such an enterprises and content creation companies, will need their own medianets.

Murali Nemani, the director of service provider video solutions, says Cisco is grouping efforts from its consumer, enterprise and service provider businesses under this medianet umbrella. For the enterprise market, Cisco has launched a media encoder that basically lives inside Cisco gear (it is available through a software upgrade), and can convert video files to the appropriate format automatically. Meh. There’s also telepresence, and the promise of unified communications tied to quick video chats. Consumer-side products include some combo device to be announced next year that combines Cisco’s Linksys home router expertise and its acquisition of set-top-box maker Scientific Atlanta.

The service provider side is where it gets interesting. The edge router Cisco announced in November has the ability to cache video, insert ads into video and control errors in transmission. Combine this with what Cisco dubs virtualization in the core of a provider’s network, and suddenly Cisco’s medianet products looks like a cross between a video cloud and a content delivery network. It’s not alone in making this CDN effort.

Nemani says in the coming months Cisco will release some customer wins that illustrate this concept fully, (including a large cable company) but essentially Cisco is building boxes that can host a service such as “Start Over” or a video-on-demand library in one location and deliver those services¬† (with ads!) to all major markets. This eliminates the time delay of deploying a new service across multiple regions and the infrastructure costs of hosting content in multiple locations close to the end user.

“Service providers are asking themselves, “How do I manage all of these assets so they don’t get duplicated across my network, and how do I make it so the content I’m pushing is being delivered efficiently?'”¬† Nemani says.

With Cisco offering equipment at the core and near the edge of their networks, the cable guys may embrace Cisco — after all this is a market with few organized end-to-end products. Ericsson (s ERIC), Motorola (s MOT), Arris (s ARRS) and a plethora of smaller equipment vendors provide equipment, but in cable especially, this is a market where Cisco’s might and wide breadth of product offerings could win.