Tandberg Television's $80 million acquisition of SkyStream consolidates two headend players that fit well together geographically as well as from a product perspective. However, in a market in which inter-vendor relationships are so important, the deal's most significant impact may be in the doors it opens for Tandberg and SkyStream. It also continues a consolidation trend that's likely to continue as the IPTV vendor market continues to whittle down.

On the surface, the Tandberg/SkyStream merger, expected to close in April, provides Tandberg with a stronger presences in the U.S. market, particularly among telcos, said Reggie Bradford, president of Tandberg Television Americas.

“From a market facing perspective, it gave us more scope of supply,” he said.

Just as important could be SkyStream's existing relationship with Alcatel, which has established itself as one of the larger system integrators for telco video projects.

“We have an opportunity to introduce Tandberg very closely to Alcatel,” said Jim Olson, president and CEO of SkyStream. “Alcatel has generally played the field and generally recommended the headend that the customer wants, but they've been tending to recommend us.”

Cisco Systems' pending acquisition of Scientific-Atlanta will give Alcatel cause to consider looking elsewhere when recommending headend equipment, Olsen added. But Tandberg brings its own close relationship with Siemens.

The next shoe to drop in the IPTV market could be acquisitions of video vendors by those same access vendors. Although the Cisco/SA marriage certainly is a step in that direction, many vendors won't make a move until one or two headend vendors establish market dominance in the IP sector.

“Other than real tight connections that are happening, like Alcatel and Microsoft, a lot of the video vendors are floating,” said Keith Wymbs, director of product marketing at headend vendor Tut Systems, noting that conditional access and security vendors may be in play soon. “Eventually things have to align in tighter groups.”