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.

Dear Openwave, Juniper is now partnering with RGB Networks

In a solution brief stealthily released this week, Juniper introduces RGB Networks VMG transcoder product within its Media Flow solution as their partner for adaptive streaming.

This solution brief, centered around mobile video delivery uses a lot of the rhetoric associated with mobile TV and TV everywhere, touting computational performance and low heat dissipation for instance. The solutions seems to be addressed at carriers, content owners, cable operators who want to enable their own mobile CDN, rather than relying on Akamai and Limelight.
It is not surprising since it is, after all, RGB's core competency, to extend professional video encoding from cable to mobile networks. Hardware based, high performance adaptive streaming and its three proprietary flavors (Apple's, Microsoft's and Adobe's) seem to be the core of the solution. That is, until their acquisition of Ripcode last year which yielded, beyond a handful of wireless customers and a software based solution, the embryo of video optimization  technology for OTT traffic.




What I find interesting, is that the same solution from Juniper, Media Flow was supposed to be as well the core of the Openwave - Juniper partnership around video optimization announced at Mobile World Congress this year. 
If you remember the press release at the time, "Juniper Networks (NYSE: JNPR) has selected the Company [Openwave] as a strategic partner to integrate its Media Optimizer into Juniper’s Media Flow solution for mobile video optimization".


We all have seen Openwave's struggle to convince the market that they indeed have technology in this space, after over 30 announced trials and customer engagements and only Wattanya Maldives to show as an announced customer in the space.


At the same time, RGB Networks has made many inroads in licensing and OEMing its technology to core networks, VAS and optimization vendors to perform transcoding, not in the mobile TV/mobile CDN space, but for video optimization. Several vendors in the space have embedded their transcoder in their solution.




Reading between the lines, I can't help but think that Juniper might be thinking of RGB as an anchor technology partner for their Media Flow solution. It makes sense to consolidate both the video delivery for on-deck content announced here with the video optimization for OTT content with a single technology partner. At that point, RGB has a lot more references and technology than Openwave.


 I would not be surprised if Openwave's partnership with Juniper was at its end, whether it will be officially acknowledged or not, only 6 months after its announcement.