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Ex-Cisco Exec Takes Helm of iNovo

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
8/21/2012
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Former Cisco Systems Inc. (Nasdaq: CSCO) and Scientific-Atlanta Inc. exec and cable industry vet Michael Harney is leading a startup that competes with his former employer, as well as with other top cable suppliers, such as Motorola Mobility, Pace plc and Arris Group Inc. (Nasdaq: ARRS).

Harney, who left Cisco in June, has been named CEO of iNovo Broadband Inc. , a Duluth, Ga.-based company founded in 2011 that's developing a line of set-tops, Docsis-capable devices and other customer premises equipment (CPE) for the cable industry. (See iNovo Hires New CEO.)

With Harney coming on board, former iNovo CEO Jack Miller is now COO. Miller worked for Harney at Scientific Atlanta until Miller left in 2000 to help start up N2 Broadband, a video backoffice vendor that's now part of Ericsson AB (Nasdaq: ERIC). "The two of us make a very powerful combination," says Harney, who is also being reunited with several other colleagues from his days with Scientific Atlanta and Cisco. (See Tandberg Completes Merger With N2.)

Cable CPE is one of Harney's specialties. Harney, who joined Scientific-Atlanta in 1980 (Cisco acquired Scientific Atlanta in 2006), most recently headed up Cisco's Service Provider Video Technology Group, and, at Scientific Atlanta, served as corporate SVP and president of its subscriber networks group. (See Cisco to Acquire Scientific-Atlanta.)



One of Harney's near-term priorities will be to determine iNovo's future product mix. iNovo has not tipped its hand on its initial product lineup, but Miller says the early work will involve set-tops and Docsis-powered CPE. He expects the company’s first products to emerge sometime in 2012. (See Ex-Cisco Execs Form Cable Set-Top Startup .)

iNovo is tasked with taking on larger, incumbent vendors in an already-competitive CPE market. Harney's convinced that iNovo will become a strong partner to the MSOs and use its situation as a nimble newcomer to its advantage, competing not just on price but on new features and innovations that will attract attention from MSOs as they seek out a new class of cable products.

"We don't have a lot of legacy issues that would cause us to spend a lot of time and money on," he says. "We can completely focus on the next new thing and get it all correct. I wouldn't underestimate how big an advantage that is."

iNovo has raised almost $2 million in seed funding and is in active discussion with strategic investors and traditional VCs, according to Miller.

Why this matters
Harney could prove to be a key addition at iNovo, a company with a deep technical and operational understanding of the CPE ecosystem. Its employees have relationships with cable operators that go back decades.

iNovo's fresh look at cable's CPE market could be coming at an opportune time. Cable's IP video migration is well underway, creating a fresh product cycle that involves a new breed of hybrid QAM/IP gateways and IP-only devices. That's expected to open the door to new entrants and shift MSOs further away from the old Motorola/Cisco duopoly. That market is also seeing some upheaval from Google (Nasdaq: GOOG)'s recent acquisition of Motorola Mobility and its Home business, which is expected to be on the block as early as this fall.

For more



— Jeff Baumgartner, Site Editor, Light Reading Cable



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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:23:22 PM
re: Ex-Cisco Exec Takes Helm of iNovo


It's a fair question and one they are still being rather coy about, when it comes to pricing and how they expect to compete in that regard.  Hope to learn more about that strategy soon, but one thing I'm keeping an eye on is the fact that several of their ex-SA folks have managed relationships with manufacturers such as Foxconn, Askey and Unihan. and given their long histories with the MSOs, I would not be surprised to see someone at least giving them a fair shot at backing up their claims. JB

msilbey
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msilbey,
User Rank: Blogger
12/5/2012 | 5:23:22 PM
re: Ex-Cisco Exec Takes Helm of iNovo


Even with a new type of hybrid device, I still have trouble understanding how iNovo can compete with the product volumes the incumbent providers can produce. Just from a supply chain perspective, how can the company squeeze the margins down to what MSOs now expect?

DCITDave
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DCITDave,
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12/5/2012 | 5:23:21 PM
re: Ex-Cisco Exec Takes Helm of iNovo


It seems cable compannies should give iNovo a chance just to use it as a possible second source in some areas to keep Cisco in check. Moto Home is likely to be mismanaged or ruined during its ownership changes and I expect that before long many big accounts will be left with one side of the old set-top/CPE duopoly. (And that's a monopoly, btw.)


ph

AESerm
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AESerm,
User Rank: Light Beer
12/5/2012 | 5:23:20 PM
re: Ex-Cisco Exec Takes Helm of iNovo


As per the Comcast RDK initiative, the CPE manufacturing model will continue to change, from externally driven product roadmaps to more simply delivering an orders that the MSOs determine themselves. (See also UPC Horizon box.) A nimble outsourcer might fit the bill.

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:23:19 PM
re: Ex-Cisco Exec Takes Helm of iNovo


Yep, and Comcast has been very active in trying to get adoption of RDK beyond the vendors and to other operators. Still will be interesting to see how iNovo can match up on price. Given all the experience iNovo has, one can imagine it knows all the tricks in the book, including where CPE makers try to pad. JB

pnni-1
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pnni-1,
User Rank: Moderator
12/5/2012 | 5:23:18 PM
re: Ex-Cisco Exec Takes Helm of iNovo


But can they hit anything that is not a softball.  The cable/stb world is changing and some of those guys are the ones that did not want the change.  Unless middleware goes bye bye(which I think it should) these guys are just small peanuts. 

craigleddy
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craigleddy,
User Rank: Blogger
12/5/2012 | 5:23:18 PM
re: Ex-Cisco Exec Takes Helm of iNovo


Good point, Jonathan. Though the pricing issues will be challenging, this "startup" possesses a cable pedigree and long industry relationships. With Moto, Cisco and others hampered by their own issues and size, iNovo might have the ability to explore new delivery models and become the "nimble outsourcer" that MSOs need to avoid getting trapped again by legacy equipment. An interesting company to watch.

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:23:18 PM
re: Ex-Cisco Exec Takes Helm of iNovo


iNovo's not saying which specific products it will offer first starting later this year, but here's its current proposed lineup of CPE that it will apparently market to MSOs, including some STBs (hybrid and IP-only) that will carry the company's Zapper brand, and some DTA devices.  A few months ago, they had some Wi-Fi small cells, but those don't appear to be there as of this writing, though the home page still mentions an outdoor WiFi hotspot.


  JB

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:23:17 PM
re: Ex-Cisco Exec Takes Helm of iNovo


There is something to be said about a group that came from the old duopoly that's trying to give this category a look with fresh eyes.... can they indeed think differently and take a new tangent on this and potentially alter the business model while also delivering something that performs at a solid price point? We'll see. 


But having all that experience could help them avoid making the old mistakes... and they are coming at it from angle of the feisty startup rather than the entrenched incumbent.  Sure, i'm giving them the benefit of the doubt, but I sense that they are very hungry to do what it takes to make a difference. It will be fun charting their progress in any case. JB

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