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Why CommScope Bought LiquidxStream

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
6/2/2011
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CommScope Inc. has bought Montreal-based LiquidxStream Systems Inc. , a startup focused on dense edge QAMs, and may build a key component for Converged Multiservice Access Platform (CMAP), an architecture developed by Comcast.

Light Reading Cable reported in March that LiquidxStream was on the block and had shopped itself to Cisco Systems Inc. (Nasdaq: CSCO) and Motorola Mobility LLC . At the time, it was believed that ATX Networks Corp. of Ajax, Ontario, was closest to pulling off the deal. (See Suitors Circle LiquidxStream.)

CommScope did not disclose the purchase price, but a spokesman said all of LiquidxStream's 40 employees will join CommScope and that the vendor will retain its presence in Montreal.

LiquidxStream's claim-to-fame is its edge QAM port density (36 QAMs per RF port), rivaling Harmonic Inc. (Nasdaq: HLIT)'s HectoQAM and putting it within shouting distance of BigBand Networks Inc. (Nasdaq: BBND)'s new MSP2800. LiquidxStream, founded in 2005, is headed up by former Videotron Ltd. exec François Laflamme. (See BigBand Plots Plans for Comcast's CMAP and Harmonic Lays Claim to Edge QAM Density Crown .)

Why this matters
Moving beyond traditional edge QAMs, LiquidxStream has been key in the development of the Access Shelf component of the modular implementation of the CMAP, a super-dense architecture that will help MSOs make the leap to an all-IP platform.

LiquidxStream has not announced a CMAP product, but CommScope tells Light Reading Cable that the vendor's existing edge QAM technology represents the company's "first step into that direction and we're committed to expanding into CMAP." That commitment grows in importance now that potential LiquidxStream competitor RGB Networks Inc. has pulled out of the CMAP market. (See RGB Shelves CMAP Product Plans .)

For more
Read more about LiquidxStream and recent CMAP developments.



— Jeff Baumgartner, Site Editor, Light Reading Cable

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Jeff Baumgartner
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Jeff Baumgartner,
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12/5/2012 | 5:03:29 PM
re: Why CommScope Bought LiquidxStream


That, or they are really banking on a CMAP migration path that involves a downstream-only version of the Access Shelf.  It'll help them blaze a path to CMAP, if that's the direction they choose, but whether that will lead to a path of revenue and growth glory...   I like CommScope's chances much better than I liked LiquidxStream's when it was a startup that was going it alone.


You're good at questioning when cmap/cesar will take off and when XYZ plan will turn into ROI, but rarely offer any answers. Care to take a stab?  JB


 

ycurrent
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ycurrent,
User Rank: Light Beer
12/5/2012 | 5:03:29 PM
re: Why CommScope Bought LiquidxStream


So why did CommScope buy LiquidxStream?


Perhaps, with CommScope's diverse portfolio (and private equity ownership), it will be insulated from the low edgeQAM margins and the who-knows-when CMAP/CESAR revenues will be realized?


Most likely a bargain sale.

ycurrent
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ycurrent,
User Rank: Light Beer
12/5/2012 | 5:03:28 PM
re: Why CommScope Bought LiquidxStream


With Comcast, Time Warner and others backing CMAP/CESAR, it is hard to challenge their timelines; it is important to them and they will likely move fwd with it, where it makes sense.


Ironic, however, that in the recent past some viewed CMAP as potentially derailing DOCSIS 3 momentum.  However, the opposite seems to be the case.


As long as CMTS sales continue - ARRIS, Cisco, Motorola Mobility - then it is likely harder for CMAP/CESAR to get a solid entrance/footing.


Market size and timing are the real questions; if I had answers, I'd probably not be in the "posting" business. But point taken that questions are simpler than answers.

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:03:28 PM
re: Why CommScope Bought LiquidxStream


But agree that they probably didn't get close to top dollar.  Several companies looked at them, but i never got the sense that there was much in the way of a bidding war going on.   JB

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:03:28 PM
re: Why CommScope Bought LiquidxStream


True. If someone says trials will start this year and deployments next year, that still doesn't really help solve the ROI riddle.  But you have to wonder which of the entrants will have the stomach to stay in long-term, so we'll see an eventual shakeout even if there's a relatively small group of vendors to be shaken out and we might witness a CMTS replay that saw companies like BBND, Juniper, Terayon, 3Com, Com21, et al,  scrap product lines or bug out.  The cable modem market used to have a huge vendor roster, but scared off many seemingly solid wannabees with deep pockets  (Toshiba, 3Com, Ericsson,etc.) when margins became wafer thin. The challenges won't be much different for the vendors when CMAP/CESAR takes hold... it's going to be a bumpy ride.    JB


 


 

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