Light Reading

Ex-Cisco Execs Form Cable Set-Top Startup

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
6/1/2012
50%
50%
Repost This

Some former Cisco Systems Inc. (Nasdaq: CSCO) and Scientific-Atlanta employees have gotten the band back together to create iNovo Broadband Inc. , a startup angling to become a new source for cable set-tops, cable modems and other consumer premises equipment (CPE).

If operators buy in, iNovo would set the stage for fresh competition against cable's incumbent set-top suppliers, especially Cisco, Motorola Mobility LLC and Pace plc .

A startup's lower overhead and lack of an installed base will let Duluth., Ga.-based iNovo provide CPE gear "at a very competitive price," said CEO Jack Miller, during an interview at The Cable Show last week in Boston.

Miller worked for Scientific-Atlanta for nine years before starting N2 Broadband, a video-on-demand (VoD) backoffice vendor that was sold to Tandberg Television in 2004 for $118 million and is now part of Ericsson AB (Nasdaq: ERIC)'s video product lineup. He and Himanshu Parikh, iNovo's CTO and a former VP and GM at Cisco/Scientific-Atlanta, are the principal founders of iNovo, and they began assembling their team about a year ago.

Most of the iNovo team also hailed from Cisco/Scientific-Atlanta and is comprised of cable vets who have not just designed, managed and sold cable CPE, but have also managed relationships with manufacturers such as Foxconn Electronics Inc. , Askey Inc. and Unihan Corp.

Ajith Nair, iNovo's VP of engineering, helped develop SA's first set-top box and was the main hardware architect for eight generations of boxes. Doug Woodhead, the company's principal engineer, directed the ASIC development group at Cisco/S-A. And Benny Hsu, iNovo VP of manufacturing partners, once managed the offshore, high volume manufacturing relationships for Cisco's home networking business unit.

"We have all the disciplines and experience needed to compete in the CPE business," Miller said.

Shaking things up
iNovo arrives amid a cable set-top shakeup. Google (Nasdaq: GOOG) acquired Motorola Mobility, and Panasonic Corp. (NYSE: PC) recently exited the domestic cable set-top business. Cisco recently sold its set-top box factory to Foxconn but keeps saying that it remains fully committed to the set-top box market. (See Google Closes $12.5B Motorola Deal , Will Moto Go Back to the Future?, Foxconn Buys Cisco's Set-Top Factory , Panasonic Exits US Cable Set-Top Biz and Why Cisco Wants Out of Set-Tops (Or Not).)

"There's a lot of turmoil in the market," Miller said, and iNovo took advantage of it as Cisco scaled back its operations on Sugarloaf Parkway in Lawrenceville, Ga. "There were some very good people available."

Miller thinks iNovo has the institutional knowledge and technical know-how to take MSO-defined CPE specifications through the hardware integration and building phases by shepherding that work through the manufacturers -- expertise that cable operators don't have.

iNovo got off the ground last November, has already shipped one product to a customer for evaluation and hopes to notch its first deployment deals before the end of 2012, Miller said. He's mum on which product is being evaluated, but the company lists a sizable lineup of CPE categories it's pursuing, including standard- and high-def digital transport adapters (DTA), IP-based set-tops, Docsis modems and gateways, and indoor and outdoor Wi-Fi access points.

The company has raised more than $1.5 million in seed financing and has begun to pursue an "A" round targeting about $10 million.

iNovo is also looking for "strategic investment from MSOs," Miller said. That's a path he's travelled before. Time Warner Cable Inc. (NYSE: TWC) participated in N2 Broadband's A round and deployed N2's OpenStream, a VoD backoffice system that let operators use video pumps from multiple vendors and played a big role in dropping costs to about $100 per stream from $300 in less than three years.

— Jeff Baumgartner, Site Editor, Light Reading Cable

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:31:23 PM
re: Ex-Cisco Execs Form Cable Set-Top Startup


I certainly appreciate iNovo's credentials, but... weren't set-top boxes supposed to go away?


I'm only half kidding. These guys sound capable of doing good stuff, but this could also be a recipe for a commodity-box contender.

AESerm
50%
50%
AESerm,
User Rank: Light Beer
12/5/2012 | 5:31:21 PM
re: Ex-Cisco Execs Form Cable Set-Top Startup


And margins here will, of course, be thinner than in a software-centric business like n2Broadband.

gconnery
50%
50%
gconnery,
User Rank: Light Sabre
12/5/2012 | 5:31:20 PM
re: Ex-Cisco Execs Form Cable Set-Top Startup


Yeah, I don't get why somebody would enter this business now.  The business is already in decline as margins have been reduced to nothing even for the major players.  Samsung has a chance because they're fully integrated, but these guys are either going to have to use commodity silicon (at high prices because of their low volume) or develop their own ASIC (on $1.5M... hah, they'll be out of business before they get it done, VCs don't have the stomach for ASIC development anymore) which will take forever.


And the whole innovation thing?  Please, Motorola and Cisco had lots of good ideas for innovations.  But the cable companies don't want any of that.  They want the cheapest possible set top and they want it to be a commodity at multiple vendors built to THEIR specifications.


These guys are going to have their heads handed to them.

Soupafly
50%
50%
Soupafly,
User Rank: Light Sabre
12/5/2012 | 5:31:18 PM
re: Ex-Cisco Execs Form Cable Set-Top Startup


I think your all missing the point.


These guys are using a "virtual company" model to create a set of competitive platforms. They are not saying they are going to build silicon themselves or design and build a ene-to-end integrated platform including components.


It seems from the piece and quick read of the website that they are going to work with the chinese & global ODM/OEM and Silicon communities to define, spec, manufacture & build a box thats targetted & relevant to the MSO community.


My Impression of the Key ingredients they offer are;


1) Expertise in "anchor customer" acquisition & execution.


2) Platform depth & breadth encompassing the silicon, hardware & software layer reqs.


3) Domain Expertise; These guys KNOW this industry. They have contacts & credibility to burn.


My key concern is whether they can consistently add value over various generations of their platform?


Fail to do that and what you guys predict will happen quickly. They will enter a battle to the bottom "war" of attrition. Very few exit such battles, fewer still with no bruising.


OR; They could be planning to exit the business by that point, hence the VC cash for a spin-out / in vehicle to a vertical or horizontal integration player.


Time will tell...


SF

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:31:13 PM
re: Ex-Cisco Execs Form Cable Set-Top Startup


Although iNovo has someone in-house with lots of ASIC expertise, I didn't get the impression that they'll be making chips, particularly now that cable's got a variety of sources now for those components, including Broadcom, Marvell, Entropic (thanks to the purchase of Trident's assets), and Sigma Designs, to name just a few. But it will be interesting to see if they can indeed bring these MSO-specified products to market for less than the incumbent suppliers. It stands to alter the business model a bit if they can pull it off. And while the long-term of the STB is in doubt as more of that functionality becomes virtual inside connected devices, i still think the death of the STB is still a ways out.  The nearer term question is whether suppliers like Cisco and Motorola really want to stick it out in that market, or if the market conditions make this a great opportunity for a much smaller company like iNovo, with the relationships and the know-how,  to step in and be successful. JB


 

Flash Poll
LRTV Custom TV
Wind River Demonstrates Carrier-Grade Software for NFV

4|22|14   |   5:00   |   (0) comments


Wind River VP of Product Management, Glenn Seiler, takes a look the industry's first and only complete NFV software platform designed specifically for the unique carrier-grade and high-performance needs of telecom networks.
LRTV Documentaries
Cable Eyes Big Technology Shifts

4|16|14   |   03:02   |   (4) comments


US cable engineers are facing a lot of heavy lifting in the coming years, notes Light Reading Cable/Video Practice Leader Alan Breznick.
LRTV Custom TV
Maximizing Customer Experience & Assuring Service Delivery in an IP World

4|15|14   |   4:57   |   (0) comments


Steven Shalita, VP of Marketing, NetScout Systems, Inc., discusses the challenges cable/MSO operators face in assuring the delivery of new IP-based services. Key points include the value of proactively managing performance, and using rich analytics and operational intelligence to better understand service and usage trends, make smarter business decisions and ...
LRTV Documentaries
Bye-Bye DVD: Consumers Embrace Digital Video

4|10|14   |   04:17   |   (7) comments


Veteran video analyst Colin Dixon, founder and principal analyst of nScreenMedia, says research shows 56% are using digital video already.
LRTV Documentaries
Video: TW Cable Puts Multicast Gateways to the Test

4|8|14   |   04:13   |   (1) comment


Tom Gonder, a chief architect at Time Warner Cable, explains how its trial of multicast gateways is impacting IP-based video plans.
LRTV Custom TV
Managing & Monetizing Big Data in Operator Environments

4|7|14   |     |   (1) comment


At Mobile World Congress, Gigamon's Director of Service Provider Solutions, Andy Huckridge, and Heavy Reading Analyst Sarah Wallace discuss the 'big data' issues facing carriers and operators today.
LRTV Huawei Video Resource Center
Data Center Energy – Build Your Data Center in a Modular Way

4|7|14   |   2:13   |   (0) comments


Dr. Fang Liangzhou, VP Network Energy Product Line, shared his thoughts about the challenges for data centers during CeBIT 2014.
LRTV Huawei Video Resource Center
Agile Network Solution – An Overview of Huawei's Agile Network Solution

4|7|14   |   2:31   |   (0) comments


Ajay Gupta, Director of Product Marketing, Networking Product Line, gives an overview of the Agile Network Solutions during CeBIT 2014.
LRTV Huawei Video Resource Center
Huawei’s eLTE Voice Trunking, Video and Data Applied for Railways

4|7|14   |   1:38   |   (0) comments


Gottfried Winter is the Sales Director at Funkwerk, a German specialist in GSM-r terminals and a long-time partner of Huawei. At CeBIT 2014, Winter talks to Light Reading about this partnership and the integration of enhanced voice trunking, video and data functions.
LRTV Huawei Video Resource Center
LeaseWeb Speaks Highly of Huawei's Datacenter Products

4|7|14   |   1:37   |   (0) comments


Rene Olde Olthof, Operations Director LeaseWeb, talks about the next data center transformation during CeBIT 2014.
LRTV Documentaries
Comcast: Reshaping the Cable Network Architecture

4|3|14   |   07:11   |   (8) comments


Shamim Akhtar, Comcast's architect and senior director of network strategy, explains why the cable company is moving to a more distributed network architecture.
LRTV Custom TV
VMware CEO Pat Gelsinger at Mobile World Congress

4|1|14   |   3:41   |   (0) comments


VMware CEO Pat Gelsinger speaks to Heavy Reading about the value of virtualization spanning from the data center to service provider networks to mobile devices.
Hot Topics
WhatsApp Threatens Carrier VoLTE
Sarah Reedy, Senior Editor, 4/18/2014
The Hungry, Hungry Cloud
Dan Jones, Mobile Editor, 4/22/2014
Who's Ready to Play Broadband?
Carol Wilson, Editor-at-large, 4/21/2014
What's the Magic of Private Equity?
Carolyn Mathas, 4/22/2014
AT&T Turns Up Gig Heat in 21 New Metros
Dan Jones, Mobile Editor, 4/21/2014
Like Us on Facebook
Twitter Feed