Video monetization and optimization 2014 market share update

As it is now customary, I am releasing today an end of year market share update for video monetization and optimization deployments. You can find here the market shares released in the spring if you want to compare the vendors' progression.

As usual, I provide market share calculations in term of deployment per vendor, the unit being one operator / country. For instance, Verizon Wireless counts for one deployment, even though the operator might deploy 40+ data centres. Groups such as Vodafone, Deutsche Telekom or Telefonica count for each of the properties where the technology is deployed.


This update is characterized by an acceleration of adoption and deployment of the technology in emerging and growth markets, together with replacements either on a per property or group-wide for tier one mature market groups. New categories of deployments, from MVNO to interconnect providers are also making their appearance, while some operators are also turning off the capability.

Large telecom equipment manufacturers have mostly abandoned their in-house projects and are relying on the vendors in this segment for video management, as illustrated by recent partnerships (Skyfire/Huawei, Flash Networks/Nokia, Openwave/Cisco...others unannounced).

Market shares

1. Citrix
   Citrix’ market share is 31%. The company has grown with the market in the period. Citrix regains the market leadership in deployment with this update.
2. Flash Networks
   Flash Network’s market share is 30% . The company has lost market share since the last update, and is sliding in second position.
3. Openwave Mobility
   Openwave Mobility's market share is 12%. The company has grown the fastest of all vendors since the last update.
4. Nokia, Opera & Vantrix
   Nokia, Opera and Vantrix market share are 6% each. Nokia has grown, Opera remains stable and Vantrix decreased market share since the last update.
5. Others
   Allot, Avvasi, Venturi, (in alphabetical order) share the remaining 9%.

The market share calculations are based on a proprietary {Core Analysis} database, collecting data such as vendors, resellers, value of the deployment in term of total cost of ownership for the operator, operator name, country and region. These data are cross-referenced from vendors' and operators' individual disclosures. This database also includes over 130 opportunities in video optimization that are at different stage of maturity (internal evaluation, vendor trial, RFI, RFx...) and will close over the next 18 months.

The market share is valid at the time of publishing but change on a weekly basis, as new deals are awarded.

The market shares in term of number of mobile broadband subscribers and revenue is not published here but is available as part of my workshop or retainer service on the video optimization market. The rankings in term of revenue per vendor are quite different from the installed market share, as different price strategies and different geographic markets are considered.

Full analysis, progression and strategy of each vendor is examined together with market dynamics in my report.

Video monetization and optimization market shares 2014

For those of you, loyal readers who have followed this report, now in its third edition, there will be no surprise as to why monetization is making its appearance in the title and figures so prominently in the analysis and opinions voiced there.

Mobile video optimization was a solution brought forward by web optimization, browsing gateway and mobile video vendors that was positioned as a means to drastically reduce the volume of video transiting through a mobile network. With a combination of lossless (caching, pacing…) techniques aimed first at reducing the inherent waste of delivering videos created for the internet and laptops in a mobile network, the solution evolved towards aggressively reducing video volume through lossy (transcoding, transrating) techniques.

Vendors in this space have evolved their offering from a broad, binary application of the technology, essentially proxying and optimizing all video traffic all the time to a more granular, targeted implementation that performs optimization to portion of the traffic, at specific points in time in specific locations, driven by policy engines or relying on network congestion detection, either on explicit indication from the RAN or interpolation relying on the state of the TCP traffic. Most vendors are also now launching customer engagement tools, sophisticated analytics or new video charging capabilities to enable early monetization plays.

As usual, I provide market share calculations in term of deployment per vendor, the unit being one operator / country. For instance, Verizon Wireless counts for one deployment, even though the operator might deploy 40+ data centres. Groups such as Vodafone, Deutsche Telekom or Telefonica count for each of the properties where the technology is deployed.

Market shares

1. Flash Networks
   Flash Network’s market share is 40% . It is the market share leader and has grown faster than the market since the last update, through organic growth and acquisition of Mobixell Networks.
2. Citrix
   Citrix’ market share is 30%. The company has grown faster than the market  since the last update.
3. Openwave Mobility
   Openwave Mobility's market share is 8%. The company has grown faster than the market since the last update.
4. Venturi Wireless
   Venturi Wireless markets is 8%. The company has lost market shares since the last update.
5. Others
   Allot, Avvasi, NSN, Opera, Vantrix (in alphabetical order) share the remaining 14%.

The market share calculations are based on a proprietary {Core Analysis} database, collecting data such as vendors, resellers, value of the deployment in term of total cost of ownership for the operator, operator name, country and region. These data are cross-referenced from vendors' and operators' individual disclosures. This database also includes over 130 opportunities in video optimization that are at different stage of maturity (internal evaluation, vendor trial, RFI, RFx...) and will close over the next 18 months.

The market share is valid at the time of publishing but change on a weekly basis, as new deals are awarded.

The market share in term of revenue is not published here but is available as part of my workshop on the video optimization market. The rankings in term of revenue per vendor are quite different from the installed market share, as different price strategies and different geographic markets are considered.

YouTube Sliced Bread: mobile indigestion?

Since 2012, YouTube has been trying to reduce dramatically the time it takes for a video to start from the moment you press play.  Flash Networks (Mobixell at the time) was among the first to detect a new proprietary implementation called sliced bread.

The matter might seem trivial, but internal research from Google show that most users find a waiting time exceeding 200ms unacceptable for short videos. 

YouTube has been developing a proprietary protocol, based on HTTP adaptive streaming DASH to decrease latency and start time for its videos.

YouTube Sliced Bread essentially compares the DASH ABR manifest with the speed and bandwidth that is available at the moment you press play and selects dynamically the closest encoding rate. Adjacent streams segments are being prepped in real time so that any change in bit rate directs a change in encoding bit rate stream dynamically. The sliced bread analogy comes in when you think as pressing play as if ordering a pre sliced loaf of bread. Only instead of getting all slices of the same size, your video player looks at the size of the connection over time and serves you slice by slice, HD 1080, 720, 360… based on what the network can support.

YouTube claims that Sliced Bread has reduced video re buffering by 40% on fixed networks. Additionally, until recently, YouTube used to download the viewing page, the CSS script and the video player for every video you click on. The company is now implementing logic to allow the player to remain from video to video, so that it does not have to be downloaded all over again. 

Furthermore, YouTube will soon start pre-loading related video content, so that if you click on a suggested video, it is already there. These “tricks” might work well in a fixed environment, where start time is paramount and video traffic volume is not relevant, but in a wireless network that is congested; these types of features would have a negative impact on the network capacity and ultimately the user experience. I have before warned about content providers' tendency to design services and technology for fixed line first.

The protocol is starting to make its appearance in mobile networks and while not yet dominating the YouTube experience, it is a perfect example of why a video service designed for the internet, to be viewed on a fixed network can have catastrophic consequences on a mobile network if not correctly adapted. This is one of the many subjects I analyse in my report "Mobile video monetization and optimization 2014".

Mobile video monetization and MWC14 wrap up

This year's Mobile World Congress proved itself extremely busy, with many vendors graduating from slides to demos and customer announcements in the mobile video field.

As usual, my "Mobile Video monetization and optimization 2014" report, now in its 3rd edition, will be released at the end of March. It features the dominant market (net neutrality, privacy, sponsored data, service prioritization...) and corresponding technology trends (analytics, big data, NFV, encryption, TCP, web and video optimization, DASH, LTE broadcast, H.265, VP9, SPDY. HTTP 2.0, 4K...) as well as in depth analysis of vendors strategy in this market.


Haven't had a chance to look through all the mobile video related announcements at mobile world congress?

Here is a list of releases issued by some of the companies followed in this blog.

As it is now customary, Allot releases its "mobile trends report" in time for the show. It features a few interesting findings such as the facts that laptop dongle users seem to be more tolerant of stalls than smartphone users, continuing to watch videos after repeated stalls where smartphones tend to stop. Additionally, it shows that in the case of the network studied, the network was inefficiently allocating bandwidth, unable to recognize larger devices, video encoding and hungry video containers to alleviate video stalls...

Avvasi was one of the busiest companies in mobile video, with no less than 4 announcements, including 2 named customers: Video minutes solution launch, Wind Canada customer announcement, Virgin France customer announcement and GSMA award shortlist. The 2 named customers are both for the product launched last year to manage mobile video. Complete analysis of the solution in my report.

Citrix-ByteMobile released its latest Mobile Analytics report at the show as well. Findings include the fact that video constitutes now 32% of social networks traffic and statistics showing that while mobile advertising in 2013 doubled its audience from 2014, only one in twenty subscriber is likely to see today a mobile video ad. In other news, the company launched a new offering in the analytics space with ByteMobile Insight, fruit of a partnership with Zettics. Big data analytics seemed to be a recurring theme with many vendors this year, with virtualization a close second.

Busy with Mobixell Network's acquisition, Flash Networks nonetheless made a noticeable change in its communication and positioning with the launch of its "game changer" campaign and the celebration of Layer8, its successful carrier OTT monetization tool now deployed commercially in several networks.

Openwave Mobility launched a new engagement tool, for customer self care and operator notifications as well as the new release of its media optimization solution.

Opera-Skyfire were not overly present on the PR front, beyond an announcement related to poor video quality in Russia's 3G networks. They will certainly be able to announce new customer wins shortly.

Vantrix made the news with two releases. A follow up to their standing partnership with Kontron on NFV and big data analytics, backed by the customary product new release announcement.

All these companies, together with Affirmed Networks, Connectem, Divi Networks, Ericsson, Huawei, Mahindra Conviva, NSN, Saguna Networks, Vasona Networks... and many others in the "Mobile video monetization and optimization 2014" report.

Thoughts on Flash Networks' acquisition of Mobixell

This is it. The news hit the press officially today and officiously yesterday through Azi Ronen's blog. Flash Networks has acquired Mobixell Networks. The newly formed company will command a leading market share in deployment in the video optimization segment.

This acquisition is the latest in a long series (see Marlin/Openwave, Opera/Skyfire, Citrix/ByteMobile and Allot/Ortiva...) and there are certainly more to come. If you are a frequent reader of this blog, it will not come as a surprise to you to see further concentration in that space.

Historically speaking, the companies in this segment have been under-capitalized to go after the market opportunity. Start-ups and reboots have been the rule rather than the exception and only recently did medium to large size companies such as Citrix, Allot, NSN, Huawei and Cisco entered the market. Inevitably, an increase in competition, together with a quasi full penetration of tier 1 has led to a price attrition.

Mobixell has been one of the proponent of the price war and while the strategy to acquire market share at any cost has served its purpose, since it has put them in the second place in term of installed base, It has been punishing on their bottom line. The company might have experienced some "investor fatigue" that has led to the historical CEO and CTO, both co-founders leaving the company earlier this year.
As disclosed to my clients, the change of direction would coincide with a strategy change, with an emphasis on profitability, but the company was already committed to a growing customer base that would require more capital to serve efficiently.

The new entity will have  a critical mass of customers in this space and a dominant market share in term of deployments, but not in revenue, as Citrix/ByteMobile still dominates most of the high-margin tier 1 mature operator groups.
No doubt this is not the endgame for Flash Networks and that more consolidations are to be expected in the near future.

Flash Networks' success will now require a large product management undertaking, to digest Mobixell , make the necessary choices between a product base almost entirely redundant and cajole both companies' customers with a roadmap that will be worth waiting for while the products align.

As mentioned previously, between policy management, optimization, charging, signalling management and DPI, there are too many vendors and too many functions with large overlap. Video is no doubt an important element of the equation as it now dominates data traffic but it is a relatively misunderstood technology that requires specialized and costly R&D investment. With so many under capitalized start ups, it is easier to acquire the technology than to develop it in-house. Particularly if you consider that it takes 40-55m$ and 7 years to bring a product to market. Many companies have under-estimated the skill set necessary to operate in video and an acquisition is also the best vehicle to acquire experienced engineers and patents. Full in-depth analysis of the market and the vendors' strategy can be found in the mobile video optimization report and workshops.

Video optimization mid-term update

As it is now traditional (here, here and here) , I update my video optimization market report mid-way from its release post mobile world congress.
This update sees many changes, including Cisco's new strategy in the space, together with company and product plans from Citrix ByteMobile, Allot, Flash Networks, Mobixell, Openwave Mobility, Opera Skyfire and many others.

Operator trends

The market trend for the segment reaffirms its maturity. Like last year, the summer has been quiet in term of activity while spring and the fall remain the high RFx quarters. We have recently seen two large groups select their vendor in the space (Telenor and Orange), more or less wrapping up the tier one group selection process for this cycle in mature markets. Growth in this segment now comes from Latin America and South East Asia, where many groups (Singtel, America Movil, ...) have yet to formulate / finalize a strategy in the space. As discussed in a recent post, coming back from LTE Asia, I have been able to experience first-hand both the interest and the confusion on how to manage efficiently OTT video in some of these markets.

Vendor trends

Citrix ByteMobile remains market leader, both in deployments and revenue. The deployment relative market share is decreasing slightly to 29%, while revenue market share is increasing. This is the result of the fact that new low-cost vendors are entering the market and tier 2 / 3 customers are buying solutions, depressing the average sale price, while increasing the volume of transactions.

Mobixell Networks remains number 2 in deployments with 23%, once again growing its market share over the period. The company's geographical growth comes from APAC and LatAm.

Flash Networks remains a strong third with 17%, growing as well faster than the market. The company is focusing on profitable growth in mature markets with large tier 1 groups.

While the vendors and their order remain unchanged at the top, the new entrants in the market are exceeding expectations, with good progress from Opera Skyfire and Avvasi for instance, while the mid-segment vendors are seeing their market shares and margin deteriorate.
For more information or to order my report, please contact me.

As usual, I provide market share calculations in term of deployment per vendor, the unit being one operator / country. For instance, Verizon Wireless counts for one deployment, even though the operator might deploy 40+ data centers. Groups such as Vodafone, Deutsche Telekom or Telefonica count for each of the properties where the technology is deployed.

The market share calculations are based on a proprietary {Core Analysis} database, collecting data such as vendors, resellers, value of the deployment in term of total cost of ownership for the operator, operator name, country and region. These data are cross-referenced from vendors' and operators' individual disclosures. This database also includes over 100 opportunities in video optimization that are at different stage of maturity (internal evaluation, vendor trial, RFI, RFx...) and will close over the next 18 months.
The market share is valid at the time of publishing but change on a weekly basis, as new deals are awarded.

Video optimization market shares 2013

This is the time of the year, when, after releasing the mobile video optimization 2013 report, I provide a little insight on the movers and shakers of that market segment and their progress over the past year.

As usual, I provide market share calculations in term of deployment per vendor, the unit being one operator / country. For instance, Verizon Wireless counts for one deployment, even though the operator might deploy 40+ data centers. Groups such as Vodafone, Deutsche Telekom or Telefonica count for each of the properties where the technology is deployed.

The market share calculations are based on a proprietary {Core Analysis} database, collecting data such as vendors, resellers, value of the deployment in term of total cost of ownership for the operator, operator name, country and region. These data are cross-referenced from vendors' and operators' individual disclosures. This database also includes over 150 opportunities in video optimization that are at different stage of maturity (internal evaluation, vendor trial, RFI, RFx...) and will close over the next 18 months.

The market share is valid at the time of publishing but change on a weekly basis, as new deals are awarded.

The market share in term of revenue is not published here but is available as part of my workshop on the video optimization market. The rankings in term of revenue per vendor are quite different from the installed market share, as different price strategies and different geographic markets are considered.

Market shares

• ByteMobile

ByteMobile is still the market leader in this segment, post Citrix acquisition. The company, with an estimated 35% market share remains stable and has grown with the market in the last year.

• Mobixell Networks

Mobixell Networks ascends this year to the second place in our ranking, with 19% market share. The company has grown faster than the market in term of share acquisition.

• Flash Networks

Flash Networks is in third place with a 15% market share. The company has seen its market share grow slower than the market last year.

• Venturi Wireless

Making its entry in fourth place this year is Venturi Wireless, who claims most of its deployments through an OEM channel with a market share of 10%. The company has been growing faster than the market last year.

• The rest

The remaining 21% is shared between (by alphabetical order) Allot, Avvasi,  Mahindra Comviva,  Openwave Mobility, Opera Skyfire and Vantrix.

Question? comments? please do not hesitate to contact me.

The sampling this year is larger than last year, as a result from new disclosures from emerging vendors that were stealth / not public last year. As a result, market shares are a little different and should not be directly compared with last year's, since some of the disclosures show deployments that predates last year's calculations.

2013: the year of Big Video

In September of 2012, Vodafone Germany shocked the industry in announcing that video was consuming 85% of its LTE network.
As we have started a brand new year and vendors and operators alike are finalizing plans for Mobile World Congress, I thought it would be timely to review what the main vendors of video optimization were up to in 2012.

Allot / Ortiva Wireless:
The company, with the acquisition of Ortiva Wireless in April and Oversi in July has certainly made great strides in their strategic plan to provide a one-stop-shop traffic management solution to its customers. Between DPI, policy management, charging functions, transparent caching and video optimization for mobile, enterprise and fixed broadband, the company has a large tool set and addressable market. The challenge will be in the integration of the acquired technologies and talents, together with the formulation of a differentiating, competitive solutions offering that goes beyond analytics, charging, managing...

Avvasi:
The company has entered the fray with a fresh outlook. Leader in mobile video QoE measurement, they have been asked by their customers to help manage the video QoE and have launched a new product (Q-SRV) to "measure, manage and monetize" the video experience in mobile networks. One to watch in 2013.

Bytemobile / Citrix: 
The acquisition of Bytemobile by Citrix last year was a big shock for the market segment. The leading vendor in market share was acquired by an industry's outsider under the rationale to enter the mobile market. Citrix is definitely starting to tickle F5 and Cisco with Netscaler as a load balancer / proxy in mobile networks. What best introduction in the mobile space than the leader in mobile internet and video optimization? It will be interesting to watch how the replacement of Unison platform by the T3000 series, together with the suggested replacement of F5 by Netscaler plays out in the coming months...

Flash Networks:
The company started the year with a bang with 3 large tier 1 customers in video optimization (MTS russia, Globe telecom and Telekom Austria Group) announcements. Since then, it has been quiet, but the company has been busy upgrading and up selling their existing customer base. It will be interesting to see whether the company will take advantage of some of the market deals coming this year.

Huawei:
The secretive Chinese vendor has seen its market share in browsing gateway increase dramatically over the last 3 years with over 114 operators and this is the traditional Trojan horse for video optimization to enter the market. Mobile internet is becoming a focus on the company's strategy in the core network and it looks like the slides on video optimization presented last year in Barcelona are morphing into a product offering. It is still early days, but Huawei can move fast when needed.

Mobixell Networks:
The company has digested its 724 solutions acquisition and made good progress in converting its installed base and winning new deals in video optimization. Not enough to satisfy its investors, apparently, with the replacement of its CEO in December last year. The company is clearly looking for different growth parameters and it is likely that we will see more strategic activities from them in 2013.

NSN:
Not much to report for the Nordic giant, struggling to impose its vision of self organizing networks in core. The sale of its OSS/BSS division to Redknee will either see a refocusing or spin off of the video assets.

OnMobile:
The company acquired Dilithium assets in 2010 and has been struggling to have a video strategy since. They briefly considered video optimization, but video is no longer a focus for the company in 2013.

Openwave Mobility:
After a rough couple of years, seeing its CEO replacement, and the spin off to an equity venture, the company is starting to re focus and to reboot its traffic management and video optimization strategy. They have a few references in the space and are working to update their browsing gateway's installed base with video optimization. It will be interesting to see if they are up to the challenge in 2013.

Skyfire:
The company took the market by storm by launching cloud-based video optimization and simultaneously announcing Verizon Wireless as a customer and investor. Since then, with a fresh round of financing, the company has been expanding its reach to Europe. It will be good to see how cloud takes in mobile networks.

In September of 2012, Jens Schulte-Bockum , CEO Vodafone Germany shocked the industry in announcing that the 10% of their customer base who have elected to shift to their LTE network had a fundamentally different usage pattern than their 3G counterparts:

“Voice, text, other messaging and data - everything that makes money for us - uses less than 15%. The bit that doesn’t make money uses 85% of the capacity. Clearly we are thinking about how we can monetise that. ”

“The bit that does not make money for us” is mobile OTT video. As mobile video threatens to overgrow every other traffic types, operators start to look at ways to alleviate the costs associated with the necessary capacity upgrades to meet the demand, as well as strategies to monetize this large, untapped opportunity. I will be releasing my report "Mobile Video Optimization 2013" on March 15 where I will examine the latest strategies from the dominant vendors in the space.

Mobile video optimization 2012 - July update

For those who follow the video optimization market, it will not come as a surprise that my acclaimed report needed already an update after its release in March.The market has been abuzz with rumors and movement, following acquisitions, re-positioning and the changes in market share:

• Bytemobile's acquisition by Citrix
• Ortiva wireless acquisition by Allot
• Openwave's acquisition by Marlin Equity Partners
• Mobile video optimization show 2012 in Brussels
• Flash Network now #2 in market share 

The report describes the trends impacting network operators, the technologies involved in video optimization, a review of the vendors and re-sellers in this space, with their differentiators and strategies.


You can find some reviews for the report and my services here and below:

“Patrick is an astute, engaging and articulate individual who has provided my company with valued data, opinion and reports on market status and dynamics in the area of OTT video. Patrick's insights have helped my company recently in developing group strategy and deployment options for video optimization and policy management. ” June 8, 2012
Top qualities: Great Results, Expert, High Integrity
Desmond O'Connor Vice President of Data Design at Deutsche Telekom group

Flash in the cloud

Flash Networks announced today that it is making its Harmony Mobile Internet Services Gateway optimization and monetization solution available in the cloud. The solution that was traditionally deployed in mobile core networks will soon be deployed in private and public clouds.

"Harmony Mobile Internet Services Gateway integrates web and video optimization, analytics, traffic management, web monetization, content control, cell-based congestion awareness, centralized caching, service orchestration, and an intelligent policy engine in a single gateway. "

I spoke today with Merav Bahat, VP Marketing and Business Development at Flash Networks and she adds: "We wanted to introduce the capability for our customers to use cloud services and cloud computing with our platform. Harmony will continue to be deployed in the core networks and in conjunction, can be deployed in private and public clouds. We have been able to duplicate several functions from our platform such as caching, storage and CPU-intensive transcoding and put them in the cloud to offer great additional savings , higher hit rates and enhanced quality of experience".`

As seen here and here, Flash Networks is the third company in the video optimization space who has announced plans to offer a cloud-based solution. Caching, transcoding, content recommendation are some of the services that Flash Networks will perform in the cloud, to benefit carriers with multi-sites or multi-networks footprint.

Cloud-based video optimization is gaining traction, as more and more mobile network operators  see the necessity to deploy video optimization (over 80 have selected vendors to date) but balk at the CAPEX and footprint necessary to enable a good quality of experience.

Cloud deployments and cloud computing were, until recently, seen as an improbable technology to deploy real time video encoding services, but a few tier one operators have tested and are deploying the technology as we speak. It seems that the technology is reaching market validation stage and is getting a much larger acceptance from the carriers' community. It is a good move from Flash Networks to capitalize on this market trend and expand their offering in that space.

Allot to acquire Flash Networks for $110 /$120 M?

This is the latest rumor from Globe. Allot, who has raised almost $80M a month ago and was rumored to be acquired by F5, then to discuss acquisition of Mobixell or PeerApp last year, has a $500M market cap. Flash Networks has raised over $61M.

The resulting company could be booking about $120M in sales and be profitable.

Allot, in a briefing with Jonathon Gordon, Director of Marketing, two weeks ago was noting: " Our policies focus more and more on revenue generation. With over 100 charging plans surveyed in our latest report, we see more and more demand for bundle plans for social networks and video. We can already discriminate traffic that is embedded, for instance, we can see that a user is watching a video within a facebook browsing session, but we cannot recognize and analyse the video in term of format, bit rate, etc...Premium video specific policies raise a lot of interest these days."

No doubt, the acquisition of an optimization vendor like Flash Networks can solve that problem, by creating a harmonious policy and charging function that actually manages video, which accounts for over half of 2011 mobile traffic globally.

As discussed here and here, video optimization becomes an attractive target for telco vendors who want to extend beyond DPI and policy. Since video is such a specialized skill, it is likely that growth in this area will not be organic. It is likely that the browsing gateway / DPI / PCRF / Optimization segments will collapse over the next 2 years, as they are atomized markets, with small, technology-driven under-capitalized companies and medium -to-large mature companies looking to increase market share or grow the top line.

MTS Russia selects Flash Networks

The deal was won last year, after a RFP shortlisting 4 major vendors. A trial in Murmansk followed the selection of Flash Networks. The solution is being deployed commercially and will be live at the end of 2011.


This is the first major announcement from Flash Networks in the video optimization space, confirming the conversion and acquisition of some of their customers from web optimization to video optimization.

“Using the data optimization platform allows us to reduce our mobile network data transmission load by almost 40% and our transit load by 30%, ultimately resulting in faster Internet speeds and better quality of data services for our users”said Sergei Stepanyuk, Head of Data Transmission Department at MTS. 


full release here.

Video optimization 2.0, market reset

On the heels of broadband traffic management's show in London last week, I thought it was time to take stock of that market segment as most vendors have launched their second generation product recently.

The market leader, Bytemobile (with 55% market share of deployments), started the trend this summer, when launching their new dedicated appliance, the T-3000. While this is not strictly a new version of their Unison product, it is a new computing platform sold as an appliance, departing from the software infrastructure business model. It is a first step towards solving some of the scalability issues experienced by the former solution, that saw dpi, policy, charging, web and video optimization inextricably amalgamated, whether you wanted to use all products or not. It gets rid as well of these expensive load balancers that were a high cost low yield proposition. Bytemobile is not the only one to experience price pressure and to take the knife to load balancing as the bandwidth requirements increase.

Mobixell, with 16% market share, seems to be at last in a position to digest their 724 solutions acquisition. While both product lines were quite complementary and had little overlap, it was a tough proposition for Mobixell to acquire 724, rationalize the technologies and workforce and face the ire of their traditional resellers and OEM (NSN, Huawei, Ericsson...). These were weary to see their supplier compete head to head with them in mobile broadband as Mobixell was rolling out 724 seamless gateway proposition along with their streaming and transcoding platform. The result saw Mobixell practice a tough price attrition in the market, helped by a low cost structure (724 solutions technology comes with integrated routing and inter process UDP-based communication that provides great scalability at low cost). Mobixell announced the launch of the new product release, called EVO, taking some of the computational power to the cloud. While some are skeptical about how much can be accomplished in the cloud for real time video optimization, it certainly is a good step towards cost and CAPEX containment worth exploring.

Flash networks with 8% has been quite busy on the market, silently plowing ahead, upgrading existing customers and winning a handful of deals. They have announced the new version of their product and are as well taking a big step in technology investment in that space.

Ortiva wireless with 3% market share has seen some very good progress this year, bagging some good high profile accounts, nearly tripling their year on year revenue, from an admittedly small footprint. The company has not announced a new version of their product yet, staying on their existing appliance model.

Skyfire labs, with 2% market share, a very innovative start up with a cloud based approach, evolved from their tablet and smartphone browsing app has also been able to grab some high profile tier 1 carrier, together with high profile VAR agreement with infrastructure vendors.

Openwave, with 1% market share, as you know, has had a very busy year on the corporate and financial front (here, here, here, and here), but has not announced much from a product, technology or customer standpoint. They are fighting for their survival and seem to be focusing to a return to financial stability (PS revenue increase, licensing of their patents to Microsoft) before investing further in technology or customer acquisition.

NSN has been developing their homegrown technology, wanting to end the reliance on their traditional partners in the space and came out with a very basic first attempt, focused around loss-less transmission. Nowadays, they are trying to push their "liquid" network concept and seem to be going at it in a fairly scattered manner.

These new product announcements signal, beyond the usual technology investment from start ups and established vendors, a market reaching a level of maturity fast, only 2 years after inception. Some might even say that this segment is commoditized before having really taken off. According to my calculations, this is a market that has generated about $90 millions for vendors this year. We can see from the number of players why price attrition plays an important role, even though traffic is increasing fast. We will see some consolidation and attrition in that space soon, as insufficiently capitalized vendors wont be able to sustain the market growth.

RGB networks, Juniper, Cisco, Huawei, Acision are all active in this space too, while others are preparing to enter the market. The market share are {Core Analysis} calculations, part of an upcoming report on the mobile video optimization space. Details and questions can be addressed here or at patrick.lopez@coreanalysis.ca.

Openwave CEO replaced - Consolidations to come in the traffic management market

Openwave announced today the resignation of its CEO, Ken Denman, quoting personal reasons. Denman is being replaced by Anne Brennan, the company's CFO.

As we have seen in a previous post, Openwave has been struggling for a while to deliver on the expectations it has raised in the market to provide an integrated traffic management solution for video.

After failing to show the results on over 40 announced trials, after failing to upsell their installed base with their next generation of products, after after buying back old patents and suing RIM and Apple, Openwave sees its CEO resign and, the same day,  is nominating Peter Feld as Chairman of the Board, replacing Charles E. Levine.

This market segment, born from the ashes of the wap gateway market, sees companies like Acision, Bytemobile, Comverse,  Ericsson, Flash Networks, Huawei, Mobixell, Nokia Siemens Networks, and others become the intelligent gateway in the network. That gateway's role is to complement and orchestrate DPI, charging, PCRF, video optimization. It is a key network function.

As most data traffic is browsing related, companies that used to sell wap gateway are the best positioned to capitalize on upselling a richer, more sophisticated gateway that can provide means for operators to control, monetize and optimize browsing and video traffic in their network.

Openwave has not been able to negotiate that trend early enough to avoid its market share being eaten up by traditional competitors and new entrants. Additionally, as the traffic has fundamentally changed since tablets and smartphones have entered the market, key capabilities such as TCP, web and video optimization were late to appear in Openwave's roadmap and proved challenging to build rather than buy.

Mobixell started the consolidation with the acquisition of 724 solutions last year.
I bet we will see more consolidations soon.