The field trial of IPTV services by Swisscom AG's (NYSE: SCM) Bluewin business unit has encountered a few early integration problems, according to Microsoft Corp. (Nasdaq: MSFT), which is supplying the software systems that enable and manage the service (see Swisscom to Trial IP TV Service and Is Microsoft Finally Carrier Grade?).

The trial involving 600 homes was due to start last month, but Microsoft TV's marketing chief, Ed Graczyk, says "there have been some last-minute glitches," and that only a small number of homes are currently testing the service.

Graczyk describes these "glitches" as the normal last-minute stuff, working to get all the pieces of the puzzle together at the same time: "We're working with brand-new hardware, and we have to integrate with that."

So is the trial already seriously behind schedule? Graczyk says it's not his place "to announce if there are any changes in timing. That's up to Swisscom."

The Bluewin team has not commented on any delays or problems, but it did respond to a market rumor that Microsoft had been ejected from the process by saying that the "TV market trial is going to be held with Microsoft."

That such rumors exist will come as no surprise to many. Hardware and software companies are desperate to win new business from service providers that are evaluating the business potential of adding broadcast TV and video services over broadband as their traditional voice revenues fall away (see Video Smokes in Amsterdam, Venice Awash With Triple Play, Siemens Gears Up for IPTV, and Video Profits on Pause?).

Microsoft's middleware system puts it up against telecom heavyweight Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and specialist players such as Myrio Corp. and Kasenna Inc., and the smaller players aren't shy about questioning Microsoft's ability to deliver a carrier-grade system.

At Supercomm, Myrio's marketing VP Roger Shanafelt said he wasn't worried about Microsoft's entry into the market and its high-profile relationships with the likes of SBC Communications Inc. (NYSE: SBC), saying that the software giant had "made announcements like this in the past, but they've never come through" (see Myrio Rides Triple Play Wave).

And Mark Gray, the CEO at Kasenna, which this week unveiled its wide-ranging TotalTV system, is somewhat more disparaging (see Kasenna Announces TotalTV). "Microsoft knows how to do a good demonstration, and it has a good-looking client [interface], but it's way off being able to deliver what service providers need," says Gray.

"Carriers see the demo and are knocked out, but then they find out that there's nothing to back it up, though it'll take them about four to six months to figure that out. We'd almost want to claim that it's fraudulent. The operators that are in trials with Microsoft are close to deserting it, and we've already stolen one of its initial accounts," claims the Kasenna CEO, though he wouldn't back that up with a name.

Gray does have something positive to say about Microsoft, though. "It's doing us a favor. It's attracting attention to the market and promoting the concept of video over IP."

Microsoft has about ten "early-adopter" carrier customers, including Canada's BCE Inc. (NYSE/Toronto: BCE), Reliance Infocomm Ltd., and Telecom Italia SpA (NYSE: TI), as well as SBC and Swisscom. Microsoft says it hasn't lost any of its "early adopters."

But it's not just the middleware providers that are getting excited about the prospects of TV, video, and triple play. Other announcements of note from recent weeks include:

— Ray Le Maistre, International News Editor, Light Reading