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.

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.

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.

Openwave Mobility turns a corner ?

Busy week for Openwave Mobility. As a reader of this blog, you will have lamented over the trials and tribulations of Openwave over the last two years.

The company seems to officially have turned a corner this week. Openwave always had a good strategic vision of the evolution of mobile data services and their business model. The internal crisis the company has been through had considerably slowed down its ability to execute. 

Since its divestiture to Marlin Equity Partner, the company seems to have engineered a come back, going back to the basics of focusing on its core competencies, while partnering with leading vendors for complete solutions offering. The latest announcements (here and here) show a maturing capacity to provide innovative traffic steering and video monetization capabilities that have been greatly needed in the ecosystem. Partnering with Sandvine (TSX:SVC) is smart as it allows both independent companies to provide an attractive solution offering, countering the likes of Allot and ByteMobile with a best of breed partnership vs. in house development / acquisition.

As announced previously, it is inevitable that traffic management, optimization and charging function should merge, when it comes to video as illustrated by the various moves in this market.

You can read more about Openwave Mobility strategy and ambitions in this space in my report.

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

Sprint kills two birds

There is little doubt in my mind, that someone woke up at Sprint one morning and looked at their current position and strategy and thought:

• Launched iPhone, check,
• Introduced all-you-can-eat unlimited data plan, check,
• Launch 4G, check, 
• ...wow that feels pretty good... 

That is until someone must have asked "Who are our suppliers of mobile internet technology who we will be relying on to grow drastically our capacity and services while reducing our costs?".


The answer was probably, "the same vendors whom we have relied on for 2G and 3G, Openwave and Ortiva Wireless"... Well, the market had changed and as the execs looked at the viability of their current suppliers, they probably accelerated their exit by selecting a new vendor. Sprint has been rumored to have selected Bytemobile last month, after a short evaluation. 


As you have seen, Ortiva got scooped up by Allot, a good operation for the vendor who has been wanting to expand their offering for the last eighteen months. The company was looking for good technology, at a low price, and that is exactly what they got. 


Ortiva Wireless has been one of the first pure play video optimization vendors, focusing on transrating and dynamic bit rate adaptation. A narrow field that allowed it to focus and execute well technically, on a few deployments, but lacked the breadth to challenge vendors with a more complete offering. The company never got the critical mass to grow organically fast enough, and when the news hit, last month, that Sprint, their largest customer was looking at alternative vendors for 4G,  the investors, who have put in over $40m in equity and convertible debt decided to look for alternative growth strategy. Allot had been in the market for a while for a video optimization vendor and the deal was concluded in a few weeks, for less than $16m.


The following week, Sandvine announces a joint video optimization  deployment with Mobixell at nTelos. Bytemobile had already started communicating (here) around policy-based optimization at mobile world congress, with Openet.


As for Openwave, if you have followed the saga (here), you will  not have been surprised to learn that after a few weeks of due diligence with a couple of possible suitors, the company decided to continue licensing its patent portfolio under the name "Unwired Planet" while divesting its product divisions split between Openwave Messaging and Openwave Mobility to Marlin Equity Partners for $55m.It is too bad that the strategic relationship with Juniper did not develop into an acquisition, but it is hardly surprising, considering Openwave's market share and technical results in video optimization.


Meanwhile, as Comviva, NSN, OnMobile, and Huawei enter the segment with their in-house and OEM'd technology, Alcatel Lucent, Amdocs, Cisco and others have selected partners for VAR and OEM and are actively participating in vendors' evaluations. 


These subjects and many more at the Mobile Video Optimization forum in Brussels June 12-13th. I am the show's official blogger and will chair day 1. I am looking forward to seeing you there.

Bytemobile lay offs and reorganization

In an interview with Fierce Wireless today, Bytemobile confirms small layoffs to reorganize its teams around viodeo optimization.


"Bytemobile spokeswoman Stacey Infantino told FierceWireless that the company recently let go of a "very small percentage" of its staff but declined to comment on the number of employees affected by the reorganization. She said that the main reason for the changes was "to realign teams to better support the ongoing success of our video and web optimization solutions and the momentum of our adaptive traffic management platform. We are confident that this will result in better alignment with growth opportunities."

As the market readies for Mobile World Congress, we see some movement on the video optimization front. Bytemobile is realigning its cost structure, Openwave is throwing the towel, many partnership announcements are expected at the show next month. To earn the latest about the vendors' strategies and market share, contact me to receive the Video Optimization report 2012 or a personalized workshop.

Openwave for sale, Sandvine's buyback, Comverse's Spin-off

Openwave Systems Inc. (Nasdaq: OPWV): 
Openwave announced today that their board of directors has decided to "pursue strategic alternatives"  for the company's mediation and messaging products business.
While this is hardly a surprise, if you have followed the saga over the last year (here, here, here, here and here) it is till sad to see one of the great companies who shaped the mobile internet divest their assets. The company is not completely up for sale, only the product business is, while the board and management team are trying to monetize further their patent portfolio through licensing deals, such as the one with Microsoft, that brought $m18 last quarter.
For a full list of potential acquirer of Openwave assets, don't hesitate to contact me through linked in or my email, at the top right of this page.




Sandvine Corporation (TSX:SVC) (AIM:SAND):
On the heels of reporting their Q4 and fiscal 2011 results ( Q411:$20.6 million revenue GAAP net loss of 3.6 million (non-GAAP¹ loss of $2.8 million); fiscal 2011 revenue $89.3 million and GAAP net loss 5.8 million (non-GAAP¹: $2.2 million loss)) and 44 new customers, announced that its Board of Directors has approved the adoption of an open market stock buyback program for the purchase of up to approximately 12 million common shares ("Shares") over a one-year period.


 Comverse Technology(CMVT)
Comverse technology is the holding structure behind Comverse and Verint. It has announced that it will distribute the share of its wholly owned subsidiary Comverse to their shareholders on a prorata basis. The move is an effort to create a more tax efficient structure and unlock some of the value. The investors welcomed the news with disappointment as the were hoping for a full buyout through M&A.

Openwave changes gear and positioning

In the latest installment of Openwave's transformation, the company sees two high profile appointments to beef up its licensing strategy.


Daniel Mendez and Tim Robbins are appointed at General Managers of Openwave's patent portfolio, in a clear move towards further monetizing Openwave's intellectual property in deals similar to Microsoft's announced earlier this year and generating $18M last quarter in licensing. This deal followed the successful re-acquisition this year of the patents previously sold to the Myriad group.


Daniel and Tim hail from Visto, who acquired and merged with Good Technology and created $350M in license revenue from intellectual property.


What I find the most interesting in the announcement, though, is the change in tag line describing Openwave over the last press releases. Openwave used to describe itself as "a global software innovator delivering all-Internet Protocol (all-IP) mediation and messaging solutions". A somewhat accurate description but really  wishy-washy and referring to "old" technology and positioning (IP communication was a revolution in the 90's and messaging, well, is not really very innovative nowadays). 


The new Openwave is "a global software innovator and the inventor of the mobile internet". That's bold, and while I can imagine many company would and might challenge that Openwave is the sole inventor of the mobile internet, it looks at last like someone at Openwave might have read my blog post from August and taken a clue. I think that is definitively the right positioning for the company to generate more traction. It will be interesting to see how vision and strategy align with the message and positioning over the next year.

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 licenses its patents to Microsoft

In a press release dated November 03, Openwave has announced its 1Q12 results and a licensing agreement with Microsoft in a separate release.

Openwave has had quite a momentous summer , between the unraveling of its relationship with Juniper, the re-purchase of its patent portfolio sold to Myriad group, and the replacement of its CEO (here, here and here). Never a dull moment. Having said that, the portfolio of patents that Openwave re-appropriated is a good representation of the pioneering position Openwave had in the industry in the 90's, with many seminal patents in mobile internet and mobile browsing. It was a good move to get them back, from a company valuation standpoint.

OPENWAVE SYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS-UNAUDITED
(In thousands, except per share data)
							Three Months Ended
							September 30,						June 30,						September 30,
								2011						2011						2010
Revenues:
	License						$	9,914					$	10,273					$	12,332
	Maintenance and support							10,671						10,677						13,993
	Services							16,790						14,255						11,203
	Patents							15,021						10						4,000
		Total revenues						52,396						35,215						41,528

While the company results for this quarter seem, at first glance, positive, they actually tell an interesting story. License revenues are still decreasing, (quarter to quarter and year to year), maintenance and support flat vs. last quarter and decreasing vs last year indicate an aging slowly decreasing customer base. The steady increase in services revenues, together with the decrease in license would tend to indicate that the company is milking customs development and change request opportunities, while customers are hesitating investing in the new product range.

Operating Expenses:
	Research and development							9,348						9,836						11,430
	Sales and marketing							8,737						11,509						10,821
	General and administrative							7,786						7,167						6,612
	Restructuring and other related costs							5,072						524						708
		Total operating expenses						30,943						29,036						29,571

Cost of revenue is flat-ish, with the notable exception of cost of services, indicating further the custom development aspect. OPEX remains on par vs. last quarter, despite a $5m restructuring charge, mostly financed by lower marketing and sales expenses.

What stands out, is that Openwave manages to turn a $3m profit in this quarter. It is due to the licensing agreement with Microsoft, whereby they are licensing Openwave's entire portfolio of 200+ patents. Patents revenue for this quarter were $15m+.
It is a good operation for Openwave, to license its portfolio to a presumably non -competitor in the infrastructure space. It brings revenue, maybe some more significant strategic tie-ins in the long term. Unfortunately it does little to Openwave's capacity to recapture market share.
For Microsoft, it is an interesting move. I suspect many of the patents will be quite liquid, when it comes to the next round of litigation. Interested to see how Nokia/Microsoft/Openwave can take on Apple and Google for the mobile internet supremacy.