Bytemobile: what's next?

Following the brutal announcement of Bytemobile's product line discontinuation by Citrix, things are starting to get a little clearer in term of what the potential next steps could be for their customers.

Citrix was market leader in terms of number of deployments and revenue in the video optimization market when it decided to kill this product offering due to internal strategic realignment. The news left many customers confused as to what - if any- support they can expect from the company.

Citrix' first order of action over the last month has been to meet with every major account to reassure them that the transition will follow a plan. What transpires at this point in time is that a few features from ByteMobile T-3100 product family will be migrated to NetScaler probably towards the end of 2016. Citrix is still in the process of circling the wagons at this stage and seems to be trying to evaluate the business case for the transition, which will condition the amount of feature and the capacity to reach feature parity.

In many cases, network operators who have deployed versions of ByteMobile T-3100 have been put on notice to upgrade to the latest version, as older versions will see end of support notices going out next year.

Concurrently, presumably, Citrix won't be able to confirm NetScaler's detailed roadmap and transition plan until they have a better idea in term of the number and type of customers that will elect to migrate.

In the meantime, ByteMobile's historical competitors are drawing battle plans to take advantage of this opportunity. A forklift upgrade is never an easy task to negotiate and, no doubt, there will be much pencil sharpening in the new year in core networks procurement departments.

Video optimization market has dramatically changed over the last year. The growth in encrypted traffic, the uncertainty surrounding Citrix and the net neutrality debate has change the feature set operators have been looking for.
Real-time transcoding orders have severely reduced because of costs and encryption, while TCP optimization, encrypted traffic analytics, video advertising and adaptive bit rate management are gaining increasing favors.

The recent T-Mobile USA "Binge On" offering, providing managed video for premium services is also closely followed by many network operators and will in all likeliness create more interest for video management collaboration solutions.

As usual, this and more in my report on video monetization.

Citrix shuts down ByteMobile

Citrix has decided to "de-invest" in the ByteMobile product line that was initially reported for sale. Citrix provided this week an update in an investor's call, on the results of its strategic review that was announced in September.
Executives commented:

"The underlying premises for the acquisition of ByteMobile have now vanished.We acquired the company for its ability to optimize video traffic,but today a significant amount of the video traffic is encrypted and can no longer be optimized. [...] We will transition some of the capabilities in the NetScaler product but for the most part phasing that product line out."

The company mentioned that ByteMobile revenue for 2015 were expected around $50m and breaking even. XenServer will also be discontinued (unsurprisingly looking at VMWare and KVM's relative success).

Citrix had acquired Bytemobile in 2012 for $435m as the company was leading the video optimization market segment.

The video optimization market has greatly suffered as a stand alone value proposition on the combined pressure from the growth of encrypted video traffic, and the uncertainty surrounding ByteMobile's future, the market segment leader in terms of installed base. The vendors in the space have bundled the technology into larger offerings ranging from policy enforcement, video analytics and video advertising and monetization. Last week, T-Mobile introduced its "Binge-on" video plan based on video optimization of adaptive bit rate traffic, and multiple vendors have been announcing support of encrypted video traffic management solutions.

Further review of the video optimization market size and projection, vendors and strategies available in workshop and report format.

Citrix selling Bytemobile

In a press release dated July 28, Citrix Systems has announced that it will collaborate with Elliott Management, an activist investment firm who has amassed 7.1% of the company's common stock and has been advocating for strategic changes in Citrix' product portfolio and operations.

Elliott had announced their plans to actively be involved in Citrix' strategy in a letter to their board on June 11. The letter laid out a plan for Citrix' stock growth and investor value creation including executive and operational changes, as well as spin off or sale of business units, including ByteMobile, acquired for $435m in 2012.
Citrix has announced that they have retained financial advisors for the sale of ByteMobile.

Concurrent with the announcement that Citrix will collaborate with Elliott and give them a board seat, Citrix' CEO has announced his retirement effective as soon as a replacement is found.

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.