Cisco Splurge Shows Video Conferencing is Hot

Cisco (s csco) today offered to buy Tandberg, a Norwegian company that makes video conferencing equipment, for $3 billion in cash, a move that would give it a broader customer base, a bunch of legacy gear as well as a name in the teleconferencing market.

And why wouldn’t Cisco love video conferencing? It’s an application that requires a fast network and a lot of bandwidth, something the communications industry is increasingly able to provide, not just at the high end but even to average consumers. And with those network expansions, Cisco wins, because it provides the underlying equipment to the service providers, as well as the video conferencing hardware and software to tweak the experience. Cisco sees video as a $20 billion revenue opportunity.

See why Tandberg’s solution was so attractive to Cisco (think: middle management) in my full story over at GigaOM.