Cisco has agreed to spend $5 billion on acquiring UK-headquartered video delivery software company NDS.

NDS sells software to broadcasters and Internet service providers to support their digital TV offerings. Its customers include BSkyB, which uses NDS’ electronic programme guide software in its Sky+ service.

Cisco said the acquisition would complement its Videoscape digital TV platform. "Our acquisition of NDS fits squarely into [our video] strategy, enabling content and service providers to deliver new video solutions that leverage the cloud and drive new monetization opportunities and service differentiation," said CEO John Chambers.

NDS chairman Dr, Abe Peled said the company’s ‘open’ software video platform fits well with the ‘open’ Videoscape platform. "A key component of NDS’s success has been our open software and services model, working with a wide range of set-top box manufacturers to enable greater choice for our customers," he said. "Following this acquisition, this strategy will continue and expand the choice of hardware solutions available to service providers worldwide."

Cisco got into the TV business when it acquired set top box manufacturer Scientific Atlanta for $7 billion in 2005.

The company shed various consumer-focused businesses in strategy shake-up last year and closed down a set-top box manufacturing business in Mexico. There had been reports that it wanted to sell Scientific Atlanta, but Chambers reitereated the company’s commitment to the business last month.

"We have by far and away the strongest end-to-end architecture for video going from the cloud to the end device," he claimed.