Cisco Systems Inc., San Jose, Calif., announced plans to acquire SyPixx Networks Inc., Waterbury, Conn. SyPixx manufactures network-centric video surveillance software and hardware that enable existing analog video surveillance systems to operate as part of an open IP network.

For Cisco, this will allow the company to offer video surveillance as a part of their Intelligent Converged Environment in one networked platform. Upon the close of the transaction, SyPixx products will become part of new business unit in the Emerging Markets Technology Group. The acquisition will mark Cisco’s entry into the physical security market.

“[The acquisition] gives us the ability to connect legacy surveillance systems, cameras, keyboard and storage systems and feed it across the network. This is a great opportunity for us to enter into the market as [SyPixx] has a huge base of systems to connect to the network,” said Steve Collen, marketing director of Cisco’s Converged Secure Infrastructure business unit.

Michael Jones, president of ProFinance Associates Inc., San Diego, a broker-dealer firm with expertise in providing financial and industry specific advisory and investment banking services, said that the acquisition is an exciting one, and shows a lot of foresight on the part of Cisco. “It’s a very natural extension for [Cisco] to come into the security side of the business,” Jones said. “Convergence isn’t a bang, it’s a process. It’s being done on a series of levels,” he added.

Offering new technologies and extending its product base into vertical markets is nothing new for Cisco. The company has been working in converging markets for some time, merging technologies such as data and voice to be available on a single platform. The acquisition of SyPixx announces Cisco’s entrance into the physical security market, but it will not be the company’s last.

“There is a real convergence going on in the marketplace between network and applications across a network–one of these is video surveillance. Companies can access live video and stored and recorded video remotely,” Collen said. “I think that the market is ripe for convergence. We know that the demand is there and we are hoping that a large company like Cisco can accelerate that convergence trend.

“We are looking at many other opportunities that will expand our video surveillance entry,” Collen said. “[Cisco] is looking at access control as one of several possibilities to create a single architecture that combines everything.”

Collen mentioned one of the business unit’s focuses, Cisco’s ICE or Intelligent Converged Environment platform, which could include video surveillance capabilities, and which the company is looking to add more technologies to. “This is basically an architecture that you can run a lot of applications across. Video surveillance is one of them, but more will follow,” Collen promised.

Upon completion of the acquisition according to Collen, Cisco will gradually enter SyPixx products into the company in two phases. Cisco, best known for providing networking for the Internet, was founded in 1984 and has more than 34,000 employees worldwide.