I Goofed: SonaeCom Ericsson/Orca Correction

I requested clarification of what SonaeCom is doing with its IPTV middleware and received the following reply:

"Following the RFI process that we had in late April (where Orca also participated) two vendors requested us an onsite trial with no commitment from SonaeCom.

Our RFI process had the goal to evaluate the industry trends and roadmaps from the principal players in the market. We often conduct this RFI processes to understand the competitive advantage or disadvantage of the solutions that we are using independently of future intentions.

One of the vendors that requested us an on site trial was Ericsson."

Ericsson's press release is consistent with SonaeCom's statement above. I read too much into it. I apologize to all concerned for this error. I hope that it has not caused too much difficulty.

Ericsson Gets Sonaecom Middleware Order

Sonaecom, the competitive provider in Portugal, has selected Ericsson's new IMS-based middleware software for its IPTV service. Sonaecom will also use video encoder from Ericsson's Tandberg subsidiary. Trials and deployments have already started.

Ericsson has been using Orca's middleware at Sonaecom. In this case Ericsson is replacing a smaller middleware vendor at a smaller deployment. Ericsson's challenge will be to do the same thing with a Tier 1 carrier.

ERicsson IMS IPTV Demo

At the CTIA conference in San Francisco this week Ericsson demonstrated capabilities that its new IMS-enabled middleware provides to integrate the TV experience with the PC and the mobile phone. It showed the ability to use presence, messaging, and both audio and video calling to communicate with other family members.

Ericsson said that IMS made these features much easier to implement and that it would be delivering these capabilities with its new IMS-enabled middleware.

The demonstration was impressive and included an attractive and simple user interface. It showed some nice ways that IPTV services can distinguish themselves.

Ericsson Introduces IMS-based Middleware

Ericsson has introduced an IPTV middleware package that is aligned with the Open IPTV Forum specifications and will be pre-integrated with IMS. It will interoperate with third-party products from IPTV companies such as Accedo Broadband, Agama Technologies, Amino, HP, SecureMedia, Sun Microsystem, Tilgin, Verimatrix, and ZyXEL.

This is a major push by Ericsson to increase its dominance in IPTV. It has a tough task in front of it to displace incumbent middleware suppliers, especially with the Tier 1 carriers. Most of the Tier 1 providers are using either Microsoft, Thomson, or middleware packages that they developed themselves.

Ericsson's IPTV Strategy

I spent a day this week at Ericsson's Analyst Relations meeting in Boston. Ericsson clearly intends to leverage Tandberg's strong position in the IPTV headend and content management markets. It also positions its Redback, Entrisphere, and Marconi acquisitions as giving it strength in IPTV networking and access.

Ericsson is also embracing the work of the Open IPTV Forum in developing an open approach to IPTV. The Open IPTV Forum is incorporating IPTV into IMS. Ericsson told me that it will be possible for existing IPTV middleware and other software component providers to adapt their products to theis Open IPTV architecture.

Ericsson characterized the existing IPTV systems as First Generation and stated that its conversations with IPTV operators indicate that they have strong concerns about the ability of these systems to scale. Ericsson told me that it thinks that many of these systems will top out at 500 thousand IPTV subscribers. It expects that moving to a second genreation of IPTV systems will create major opportunities for it.

There is no question that Ericsson is late to the IPTV party. Its acquisition of Tandberg clearly gives it a strong presence in the market but not as a full service provider.

It will be interesting to see if its view of the market will pan out. Personally, I think it will be much more difficult for Ericsson, or any other large full service system supplier, to break into the market at this time.

Three Screen Strategies

This week three interesting three screen were announced or shown at NXTcomm.

Verimatrix introduced its content security system for mobile applications. It now provides a single system that can support TVs, PCs, and mobile devices. Verimatrix has also added support for other security technologies into its system such as OMA DRM, Microsoft DRM, and Marlin DRM as well as its own VCAS DRM. This gives the service provider the ability to deploy a single system that can support a broad set of content security technologies.

Ericsson's Tandberg TV demonstrated a three screen metadata system that gives service providers to manage the metadata for their video assets including the ability to supplement the metadata delivered with the asset with additional metadata that is available from Internet sources. It also gives users the ability to browse and search this metadata with a very attractive interface from either the PC or a mobile device.

Alcatel-Lucent gave a demonstration at NXTcomm of three screen technology based on the Microsoft Mediaroom DVR capability. This system copies the content that the viewer records on the DVR to a network server and then provides access to these private network assets from both a PC and a mobile device. The network provides a catalog of what is available and the handles the format and compression conversion required to display on either the PC or the mobile device. A viewer can automatically record their favorite programs and then view them using either a PC or a mobile device while they are on the road.

Three screen TV is moving from hype to reality. Both Verimatrix and Tandberg TV now have products that add real value. The Alcatel-Lucent demonstration is quite interesting but raises a number of issues that need to be addressed. For example, the content providers may object to this use of their assets. There are also real privacy issues when you take private content and put it onto a network.

Ericsson Chases Tandberg

Ericsson has submitted an offer for Tandberg TV at $1.4 billion that is 10 percent higher than the recent offer from Arris. Ericsson already owns 11.7 percent of Tandberg.

This offer shows that after a late start, Ericsson is getting more serious about TelcoTV. The addition of Tandberg to Ericsson would put it in the same league as Alcatel-Lucent, Siemens, and Cisco in terms of their IPTV capabilities. If this merger goes through it will likely stimulate more M&A activity. Harmonic is certainly a choice candidate. It is also likely to stimulate activity in the Middleware and Video On Demand area. Minerva, Orca, Bitband, and Kasenna are likely candidates in these areas.