The operating system for IPTV, also known as middleware, is the heart of a service provider’s video offer. Middleware has had an interesting history within IPTV circles, especially among tier 3 IPTV providers. We’ve seen a few middleware options come and go, and news out of TelcoTV last week is Cisco has joined this cycle.

There’s been no formal confirmation of this from Cisco, but there was enough chatter from insiders to reveal that Cisco has pulled the plug on their middleware offering, which was a part of their IPTV Service Delivery Platform (ISDP). ISDP is Cisco’s attempt at a turnkey IPTV offering for service providers. It has many other elements besides middleware, many of which I assume will continue despite the middleware exit.

Cisco’s move is not surprising, given the challenge for middleware providers in North America. The issue boils down to segmentation, and who companies will target with their middleware platform. The IPTV market in North America is broken down into two distinct markets – 1) Tier 1 and 2 players like AT&T, CenturyLink, TDS, Telus, and others, and 2) everyone else, which include a sizeable number of small tier 3 providers. For all intents and purposes, Microsoft dominates the first category – tier 1 and 2 providers – with their Mediaroom product. That leaves the universe of everyone else to Microsoft’s middleware competitors, and while numerically there are many more tier 3 providers, when measured by actual subscribers, it comprises a much smaller market. Too small, some argue, to support the number of middleware providers chasing it.

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A brief history. Early on in the IPTV lifecycle, middleware for tier 3 carriers was pretty much dominated by Myrio, which actually emerged from a scrappy little bunch out of Reno, Nevada called SourceNet. Myrio was purchased by Siemens back in April 2005 and is now a part of the Home Entertainment 3.0 platform from Nokia Siemens Network.

Myrio’s transitioning over the years opened the door to another middleware player, Minerva Networks, who currently stands as the market leader in the tier 3 IPTV space. Other middleware players on the fringe, including Ericsson, Conklin-Intracom, Innovative Systems, and Quative, among others (and until very recently Cisco), are fighting over whatever middleware scraps remain.

I suspect Cisco took a hard look at the reality of the market and decided it just wasn’t worth the effort – there’s simply not enough dollars out there to justify the R&D, sales and marketing, and other expenses needed to build and maintain a viable middleware product. At least not enough for a company like Cisco.

To make things even more interesting, Microsoft, which has pretty much written off the tier 3 market, is now elbowing its way in, primarily through resale partners like Motorola, Alcatel-Lucent, and now Cisco. Cisco will be attempting to transition their small middleware customer base over to Mediaroom, in a way that one insider tells me, “makes them whole.”

So the middleware saga continues. And not to throw a monkey wrench in its complicated state of affairs, but the next issue on the horizon to deal with is OTT video and its implications on middleware. New players like Google, Apple, and Boxee, among others will influence the direction of IPTV and the operating system that controls it for service providers. Is Google TV the latest iteration of middleware?

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16 thoughts on “Middleware Shake-Up Emerges from TelcoTV

    1. I'm not sure its still 75 servers for MR in a small system, but there is a MSCE or MSMOUSE full time engineer requirement that is a stickler for most and some WHDVR premise requirements I think. I am just totally surprised that MS or Cisco is so bent on knocking out the little guys. IMHO that starts to look more like Sadism rather than business.

  1. Microsoft is a given for bigger companies, but I don't see them as a big player in tier 3. But tier 3 does need at least two viable middleware providers to keep them honest. Beyond Minerva, who will it be?

    1. Innovative Systems, focused on Tier 3 Companies for IPTV Middleware and other advanced services. We have already shipped over 400 of our APMAX(tm) Systems and IPTV is another service offered on this same affordable, low energy use hardware platform. Check out our website at http://www.innovsys.com. We had quite a crowd at our booth and during the Calix Users' Group Meeting. Contact me if anyone wants to hear more about our solution. We are working diligently to provide advanced Middleware solutions for Tier 3 customers that the others have left behind…

  2. Not sure MOT resekks Mediaroom, but ALU does. And there is a reason (or rhyme) to ALU's TelcoTV award: Virtualizing MR in a rack will work for many smaller telcos. BTW, Minerva's 200 customers and 20 million homes passed is not a bad average customer subscriber count (for someone) to grow into…

  3. Will Mot or ALU stay in the tier 3 market based on their history in this market? After Mot closed Next Level will they stay in tier 3 space this time? If the tier 3 market wasn't big enough for Cisco is it big enough for Microsoft, Mot or ALU?

  4. Motorola co-CEO Greg Brown said the handset-maker hopes to complete the spinoff of its cell phone and set-top box businesses into a separate company by January. How will this impact the future Mot IPTV in tier 3 market?

  5. it seem MS can simply market their content direct via Xbox. how long will it be before MS sells off or exits the MW space also?

      1. i don't think they will need to "stay in" the IPTV market as a stand alone product. they could sell that technology to ATT and let them continue to develop that platform as Uverse. i guess my point was that they could simply market a solution direct to consumer via the Xbox.

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