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Cable/Video

Arroyo Touts MSO Customers

Video delivery system startup Arroyo Video Solutions Inc. is claiming early success in the North American video server market as it battles to wring service provider dollars out of large multiple systems operators (MSOs).

The company, which has just unveiled details of its software-based OnDemand video product, says three of the top 10 cable operators in North America have its technology installed -- one in commercial deployment, and two in field trials (see Arroyo Unveils OnDemand).

Non-disclosure agreements prevent it from naming names, but it's worth noting that the company is backed by the investment affiliates of Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable, two of the biggest MSOs in the market (see Top MSOs Assist Arroyo).

Arroyo CEO Kim Kelly, herself a veteran of the MSO market, says the company is attractive to cable operators because of its flexibility (see Arroyo Names Cable Vet as CEO). She says the MSO deployments and trials include a greenfield deployment; an incumbent where Arroyo has usurped a larger supplier; and another incumbent where the startup's technology is working alongside the existing video servers.

Kelly says Arroyo's approach is to build a flexible and standards-based system that can easily work alongside other video systems in incumbent networks. "The service providers don't want to be restricted by their hardware in this way," she says.

Independent video systems analyst Huw Price-Stephens says the key for Arroyo is the underlying standard hardware and the experienced personnel. "You can't come to the market now with a proprietary pitch," so making a lot of noise about the open hardware platforms is the right thing to do, he says. "And it's important that Arroyo has people with a track record in the industry."

Arroyo's system hosts the streaming video and video storage functions on separate servers; and additional capabilities can be added without having to take the system down, as is common with some legacy systems, according to the company (see Who Makes What: Telco Video and C-COR Acquires nCUBE).

The other benefit Kelly claims for Arroyo is scale: "We offer 10 times the storage and streaming capabilities of the older, incumbent systems" from vendors such as Concurrent Computer Corp., nCube Corp., and SeaChange International Inc. (Nasdaq: SEAC). (See C-COR Completes nCube Buy.)

The company says those capabilities are driven by the "video accelerator" software developed by the firm's founders, former 3Com Corp. (Nasdaq: COMS) CTO Paul Sherer and former Novell Inc. (Nasdaq: NOVL) technologist Drew Major.

Arroyo also claims similar performance gains over rivals such as Kasenna Inc., the other video server player that has based its technology on standard server platforms. Arroyo claims its streaming servers provide up to 3,000 streams of 3.75 Mbit/s in three rack units (RUs), compared with 320 streams from rival vendors, while a 4RU storage server can "ingest" 160 live TV channels and hold up to 9.6 Tbytes of video (equivalent to 35,000 hours of content per rack), enough to support TV on demand and network-based personal video recorder (nPVR) services.

Not everyone is impressed by these claims, however. Robert Hopkins, European sales director at Kasenna, says the tenfold improvement claim is misleading and "doesn't compare apples with apples." In particular, he says, the streaming claims compare Arroyo's new system with old Kasenna capabilities. "We announced 1,000 streams per single rack unit system last year," which makes 3,000 streams in three rack units, the same as Arroyo, he insists (see Kasenna Unveils Streaming Tech).

Hopkins points to Kasenna's own success at MSO Charter Communications (Nasdaq: CHTR), which he says is testing the new streaming system (see VOD Vendors Win MSO Deal).

One thing is clear: The video server market is heating up, and it's an opportune time for startups such as Arroyo and Kasenna to make their marks.

One thing Arroyo is missing is a strong partnership with a large distributor that would open doors and expand market potential. Such alliances are already proving vital in the nascent IPTV market, and could sort the wheat from the chaff in the coming few years (see Alcatel, Microsoft Tuning IPTV Deal, Kasenna Leads IPTV Alliance, and Siemens Gears Up for IPTV).

Kelly says the company is engaged in a number of discussions, and it has "a great first quarter in store in terms of partnerships and customer announcements.

Another sector analyst, Bob Larribeau of Larribeau Associates, says it makes sense for the startup to focus on the cable market to start, but notes that the market for video over IP networks is "picking up a lot of steam. There are opportunities for new vendors to build themselves a position just now."

Larribeau adds, though, that Arroyo is so new to the scene that it's hard to verify the company's technical claims: "It's best to take those claims with a pinch of salt."

— Ray Le Maistre, International News Editor, Light Reading

andybryant 12/5/2012 | 3:24:24 AM
re: Arroyo Touts MSO Customers http://www.siliconbeat.com/ent...

Hmm.

Arroyo raise another $12M.
Kim Kelly steps down as CEO, but remains on board.
CTO (Paul Sherer) is named interim CEO.
Andrew Verhalen, a partner at Matrix Partners, has been appointed to its board of directors.

What's going on here? Why did Kim step-down after such a short time as CEO. How come they don't have a replacement ready to roll?

A.
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