It’s been a little over a year since Cisco decided to exit the IPTV middleware business. That middleware platform powered Cisco’s IPTV Service Delivery Platform (ISDP). I suspect another IPTV middleware offer is about to meet the same fate, with news that Nokia Siemens Networks (NSN) is refocusing their company entirely on mobile broadband. Read between the lines and you might come to the same conclusion that I have – goodbye to their IPTV middleware platform, Home Entertainment 3.0, at least as a part of NSN.
NSN has not formally announced anything regarding their middleware offer. But their recent announcement of a reorganization of the company, which includes layoffs of 17K employees seems to suggest IPTV middleware is on the outs. A NSN spokesperson replied to an inquiry from Telecompetitor regarding the future of their middleware efforts with this response, “It’s not appropriate at this time to talk about individual targets or breakdowns. We are very clear, however, that Mobile Broadband and Services is at the center of our new strategy and business areas not consistent with the new strategy are planned to be divested or managed for value.”
The NSN middleware platform is by no means a market leader, at least not anymore. But their middleware platform has historical significance in the world of IPTV. The heritage of that middleware platform helped shape the IPTV industry we now witness today.
The first IPTV middleware platform I was exposed to was back in 1998, and it came from a Reno, Nevada based ISP called SourceNet. Truth be told, switched digital video platform is probably a better descriptor than IPTV, since those early deployments used ATM, not IP. SourceNet had this crazy idea of selling video services over their ISP network and developed the software that allowed them to do so. They then began marketing that software platform to telcos and the IPTV movement was off and running.
SourceNet soon realized they were on to something and decided to take it to the next level. They got some funding and renamed their middleware platform Myrio and moved their operation to Seattle, Washington. Myrio middleware became the market leader, particularly among smaller tier 2 and 3 telcos.
It wasn’t too long before Siemens came calling and bought Myrio. Soon after, Seimens became Nokia Siemens Networks and the Myrio middleware platform was absorbed into their product portfolio (and some would argue, killed its promise in the process), ultimately becoming Home Entertainment 3.0. Maybe NSN will continue supporting the platform, but from my vantage point it doesn’t pass the “Mobile Broadband and Services is at the center of our new strategy” test.
NSN would not reveal to us the total number of companies who use the platform. Even though their numbers are significantly down from the Myrio heyday, they do still have some significant customers including HickoryTech, KPU, and most recently Daktel Communications. If my prediction is right, these IPTV players will soon be looking for a new middleware partner. NSN tells Telecompetitor they are currently communicating their “transformation strategy” to their customers.
With the potential exit of NSN middleware, by my estimation, we’ll have a three horse race for IPTV middleware share in the U.S. market. That race includes; 1) Microsoft Mediaroom, who is clearly making some headway with smaller carriers (thanks in some part to the exit of Cisco), 2) Minerva, who leads the U.S. market in terms of number of deployments (but not number of subscribers), and 3) Innovative Systems, who is carving out a niche among smaller tier 3 IPTV providers.
Stay tuned …
11 thoughts on “Another IPTV Middleware Exit?”
Is anyone at all surprised by this?
Has everyone also heard that Motorola just exited from the Mediaroom hosting business?
Exited? Did they ever even get that hosting model started?
Do you have Motorola confused with 180 Squared?
Yes, I learned that yesterday, too.
There was a rumor going around at the Calix User Group meeting the first week of November that NSN was halting with Myrio, too.
Another clear indication that IPTV is a financial loser for small to mid-size telcos.
IPTV is a loser unitl you get a good base built. Once you hit the 1000 sub mark you can turn a small profit. And ANY profit is a good one when It comes to IPTV… If you plan on using Myrio or Media room, well there is no profit in your near Future. Smaller Telcos need a better priced solution such as Conklin IntraComm's CDN manager. It is cheaper then most and still touts some really cool features that most would feel adequate to steal away the local cable companies subs! If you build your network and your headend wisely you can make money on video! Not alot… But its better then losing money on your retention tool!
Yeah but companies like Conklin won't make it over the long term. That's the problem. Middleware providers need scale, just like IPTV providers do. If you have a bunch of small IPTV players that don't even add up up to 100K subs, you can't sustain the R&D, product development, maintenance, and SG&A costs to keep a competitive middleware platform relevant. That's why these IPTV vendors are falling by the wayside – there's not enough scale to go around. It might be cheap for you in the short run, but then you'll be faced with having to find a new middleware platform later, because your small, inexpensive option won't be around over the long term.
Bernie, enjoyed your use of "take to the next level". That was in fact our intention.
CSP like Belgacom has currently a littel more than 1 Mio IPTV customers and an average ARPU from 20€ per month. This multiply to a yearly 240 Mio € TV business for Belgacom (20 € * 12 month * 1Mio customers) – all information is from public figures. By the way – Belgacom is an Nokia Siemens Networks IPTV customer.