the onda

I was talking to another entrepreneur this week about Cisco's acquisition of Pure Digital, and we both agreed that contrary to popular belief, the acquisition makes a ton of sense, and not just for the obvious reason that more video on the net means more Cisco gear pushing the bits around.

The real reason why it makes so much sense for Cisco to spend a half a billion dollars on these guys is because Pure Digital has demonstrated that it is possible to pose a credible threat to the consumer electronics giants by surfing along the grain of the most valuable axiom in technology since VHS versus beta: in any consumer horse race, convenience will beat fidelity every time.

The Flip series of cameras is far from being the high quality option, but building the USB jack into the camera and putting a modicum of effort into the software that uploads the clips to the net makes the gizmos the most convenient way to publish videos in the market.

It happened when the web beat client server in the enterprise. It happened when MP3 beat high quality CDs. It's happening now as netbooks spank laptops and iPhones destroy more powerful and complex smartphones. It's why Google Apps will eventually kill Microsoft Office and why storing data in the cloud will also trump local storage even as the latter migrates from platters to RAM. And I'd be willing to bet that it's going to happen as H.264, Flash video, and Hulu blow high definition television back into the laserdisc era.

In fact as I type this post on my netbook, I'm listening to Pandora on its tinny speaker because my main iTunes library is not accessible via my in-home audio distribution system (my main Mac is asleep). And you know what, it's perfectly fine for Friday night around the kitchen table.

But if the essence of the strategy is to take it on faith that convenience will always beat fidelity, why bother paying such a large chunk of change for a company? Because big companies— especially ones that have gotten rich selling fidelity to corporate customers on the back of explosive demand— find it impossible to act to deliver convenience over quality.

An example: here at HP, the mantra that when it comes to printers, "it's not about feeds and speeds anymore," is something you'll hear over and over in meetings to mean that the race for fidelity is over in the inkjet printer business. And yet, we're still bringing out better and better printers instead of figuring out how to make ones that print in under a second and take spent coffee grinds for ink.

I suspect that there are a ton of IP video codec engineers at Cisco that feel the same way which is why the purchase of Pure Digital may be just what they need to turn their heads sideways and finally accept that, for consumers, convenience beats fidelity every time.