Cisco Systems has acquired critical technology to build an on-demand content delivery platform with the acquisition of Arroyo Video Solutions Inc., an executive said Tuesday.

Advanced clustering, content distribution and algorithms acquired with Arroyo will make it possible, Cisco senior director of IPTV and video development Kip Compton said. Work on the platform will begin once the $92 million deal closes.

The system will support digital content for cable and telecommunication carriers delivering on-demand interactive media and advertising services to TVs, PCs, set-top boxes, mobile handsets and other devices.

"The technology from Arroyo enables customers to gain performance from standard hardware that surpasses the performance other proprietary hardware tries to achieve," Compton said. "Carriers tell us they want to hit all the different screens and devices with one system and not have to do everything three or four times in their servers."

Arroyo's software works by clustering servers, allowing customers to distribute them around the network, rather than put them all in one place. Compton said it's more efficient than having to "backhaul" the video traffic to one location. If the video-on-demand equipment fails and a session ends, the customer doesn't need to restart the box.

The clustering and content distribution software can detect failures and recover quickly, so glitches won't appear on the screen. Analysts believe Arroyo's software gives Cisco an edge in the on-demand video market.

Infonetics Research Inc. principal analyst Michael Howard says the Arroyos software not only delivers the digital content, but searches the network to find it. "Service providers are taking the first step toward making content that aired three weeks ago available to the consumer at any time without having to record the show on TiVo, for example," he said. "Carriers are using the Arroyo software to test the service today."

Cisco has made a lot of investments in networking, and the ability to bring the technology into the home. Greg Ireland, IDC consumer markets analyst, said challenges that remain include integrating all the technologies under the same roof, as well as piecing together the products and services into a unified strategy.

Compton says that unified strategy include blades and appliances placed around the network to communicate and distribute content automatically.

Although Cisco gains a critical piece of the puzzle with Arroyo, Compton agrees technology to complete the task is missing. "There have been advances in content trans-coding, the ability to translate content from one format to another," he said.

The content format sent to a mobile phone differs from the content sent to a television. Additional technology is required to translate the formats. Assisting in the transition, Compton says, technology acquired from Scientific Atlanta last fall.