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CES: 2Wire Brings Apps Home

2Wire Inc. is aiming to bring carriers more deeply into the managed services area by offering an open software platform on its HomePortal GEM gateways, which were launched earlier this week at the 2009 International CES. (See 2Wire Unveils New Gateway.)

The goal is to let carriers get a piece of the revenues made from selling applications. Jaime Fink, 2Wire's vice president of technology and strategy, contrasts this to the iPhone model, where the applications store makes money for Apple Inc. (Nasdaq: AAPL) but cuts AT&T Inc. (NYSE: T) out of the deal.

"There are RFPs [requests for proposals] with the major American telcos for a services management gateway, and they're starting to require a services platform running in their gateway products," Fink says, noting that European carriers are showing similar inclinations.

The GEM line offers some hardware flexibility, too, with add-on modules for particular applications, such as home automation.

2Wire built it that way to make the baseline GEM box as widely appealing as possible, rather than develop a series of spinoffs. "The demand that we're getting on these new services is of high interest, but nobody knows what the takeup rate is going to be on the vertical services," Fink says.

GEM is meant to fit into pretty much any broadband-enabled home, whether it's using plain ADSL or more advanced U-verse/FiOS-style TV services.

The more interesting part of GEM, though, is the open software environment. 2Wire is inviting third-party developers to write applications and sell them to end users through the carrier's portal. The applications would run on the gateway, rather than elsewhere in the network.

"All of the majors have decided that where they run the applications will be inside the gateway in the house."

For the applications that require a purchase, 2Wire would handle the back-end management and billing, something it's already doing with some of its other products.

2Wire is already sharing the necessary software development kit (SDK) with a variety of partners. Logitech Ltd. , OpenDNS , and Sharedband Ltd. are the three name-checked in this week's press release.

The applications in question aren't just the fun-and-games type. Sharedband has developed a way to let two or more GEMs aggregate their bandwidth, creating a bigger pipe to the outside world. It's seen as an alternative to buying up more T1s for a small business.

2Wire intends to only sell GEM through carriers. Cisco Systems Inc. (Nasdaq: CSCO), by contrast, is approaching the home-networking market from a retail standpoint, with products such as the Media Hub network-attached storage device. (See Cisco Goes Content Crazy.)

"They've been very over-the-top focused," Fink says. "They've got good features, but they're not developing an infrastructure to let people develop applications and sell them to the service provider."

Coincidentally, the GEM line can be used as a home backup device just like Media Hub, since one of GEM's hardware add-ons is a hard disk drive. "A lot of our service providers are going to start offering whole-home backup."

GEM is in carrier labs now. Fink's guess is that carriers will start offering the gateway to customers in the third quarter of this year.

— Craig Matsumoto, West Coast Editor, Light Reading

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