Long before Cisco (Nasdaq: CSCO) considered buying Inlet Technologies, the two companies were working introduced to each other by mutual customers who had problems that needed solving.

“They have done some amazing work,” said Cisco executive Kip Compton in an interview with WRAL Tech Wire.

Two years later, Cisco ended up buying the seven-year-old Raleigh technology firm for $95 million. The deal was announced Friday morning, and Cisco plans for most Inlet employs to transfer to its campus in RTP where more than 4,000 people already work. (Read about the acquisition and Inlet’s background here.)

“I’ve been familiar company couple of years,” said Compton, director and general manager of Cisco’s Video and Content Platform Business Unit. “We became familiar with each other because we had a number of customers who asked us to work together on solutions. We’ve gotten to know each other very well since then.”

While Inlet and Cisco were “not technically” partners, Compton said the companies “quite frankly have done a lot of mutual work.”

As Cisco has in recent years moved more into video services and delivery and as consumer and enterprise demand for video has exploded, the networking giant began paying close attention to Inlet’s technology and the people supporting it.

Inlet provides patented approaches to video compression and delivery, including the capability to adapt video streams to end user devices and network conditions. And the Inlet technology does so in real time, Compton noted.

“We were very impressed not only with the technology but also the team,” he explained. “They are very customer oriented, which is a big part of the Cisco culture as well.”

Compton, who is based in San Jose, said Cisco included retention bonuses in the $95 million package for Inlet because it wanted to retain Inlet’s employees. Keeping employees of acquired companies is a Cisco tradition, he added, since the company typically buys other firms for their technology and people talent.

Most of Inlet’s 65 employees are expected to become part of Cisco, including Chairman and Chief Executive Officer Don Bossi. While Compton would not discuss specifics for individual employees, he said that Rossi would be an “important part of the transition.”

Bossi, a tech executive as well as venture capitalist and investor in Inlet, has served as CEO since July 2009 when company co-founder and CEO Neal Page died.

Cisco’s most immediate plans for use of Inlet’s products and technology is in its own Videoscape offering that was announced at the Consumer Electronics Show last month.

“This enables consumers to watch video on any device, and Inlet’s technology fits into that,” Compton said.

Cisco chose to buy rather than license Inlet’s products and services so that the company could integrate it across other product lines, he added. The company also can apply more resources for further research and development than Inlet could have done by itself, he added.

Cisco acquired 100 percent of Inlet’s shares, Compton said.

Capitol Broadcasting, the parent of WRAL Tech Wire, is an Inlet investor. (Why did Capitol invest? Read here.)

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