GridNetworks Snares Cisco Money

GridNetworks Inc. , a startup delivering high-definition video over the Internet, is now revealing that Cisco Systems Inc. (Nasdaq: CSCO) participated in a $9.5 million funding round announced in October.

That round, GridNetworks' first, was led by Panorama Capital. (See Cisco Invests in GridNetworks and GridNetworks Raises $9.5M.)

Cisco and GridNetworks aren't saying much about product roadmap plans that might involve the Gridcasting peer-to-peer (P2P) software, which consumers can download today. GridNetworks uses a combination of P2P and content delivery network (CDN) technologies to transmit high-definition video in 720p format over the Internet, to be shown on big-screen TVs and other hi-def displays.

For now, GridNetworks will concentrate on getting its system off the ground, with the aim to scale it to "Nielsen-sized audiences," according to the startup's president and CEO, Tony Naughtin, a founder and former chief exec of Internap Network Services Corp. (Nasdaq: INAP).

"We're focused on going to market and building relationships with larger television networks," he says. "We have a lot of heavy lifting to do, but we have fuel in the tank to do it."

But expect the Seattle-based startup to top off the tank soon enough. Naughtin notes that his company expects to polish off a B round in late 2008 or early 2009.

Cisco's could play a role in the budding company's longer-term strategy to embed its software in network endpoints, such as set-top boxes and home gateways. With Linksys and Scientific Atlanta under the corporate umbrella, Cisco has such products in its portfolio.

Cisco is also rapidly becoming a key video-on-demand (VOD) player following its $92 million acquisition of Arroyo Video Systems last year. (See Cisco Snatches VOD Vendor Arroyo Video .) At recent tradeshows, Cisco has demonstrated how cable operators can pipe Internet video to the set-top.

GridNetworks launched its service in November 2006, with an initial foray focused on small and medium-sized business Web portals. It's now turning its attention to studios, television networks, and other content providers that are looking to deliver their fare over the Web. Naughtin says he has carved out some "production relationships," but the company isn't ready to publicize them. GridNetworks claims to be supporting those trials with "several thousand" clients installed on PCs.

GridNetworks' delivery architecture is a hybrid of P2P and CDN technologies. Its Gridcast Connector client gets installed in a PC and sits idle until directed into action by the company's control platform.

That system locates up to 16 peers best suited to deliver "slivers" of a program that the user has requested. However, buffering of the first 30 seconds of a show or movie is handled by a wholesale CDN connection. The CDN element could stay active if GridNetworks determines that it's needed for full 720p delivery.

Naughtin says this "directed peer-to-peer" approach helps to avoid congestion in the last mile of broadband service networks.

GridNeworks has already signed on one "well known" CDN that Naughtin won't name, but could hook up with as many as three. (Check Contentinople for an exhaustive list of CDNs, by the way.)

"It's a true TV experience," Naughtin says, forecasting that the video quality and audience reach GridNetworks is attempting to achieve will help content partners develop a lucrative advertising model.

GridNetworks does require a downstream connection of at least 1 Mbit/s. Upstream peers will require "no more than 120 kbit/s," Naughtin says. "That still ensures you have headroom for VOIP or [multi-player] gaming. It's respectful of your network resources and your storage resources."

Regarding the latter, GridNetworks asks, but doesn't require, users to give up 2 gigabytes of hard disk space.

But what's a P2P story without bringing up the Net neutrality debate and the Federal Communications Commission (FCC) probe into how Comcast Corp. (Nasdaq: CMCSA, CMCSK) manages P2P traffic? (See Comcast Defends P2P Management .)

It turns out that GridNetworks may be on the side of service operators. "I will say what's time-proven, is that networks need to be managed for the benefit of the greater good," Naughtin says.

— Jeff Baumgartner, Site Editor, Cable Digital News

materialgirl 12/5/2012 | 3:45:49 PM
re: GridNetworks Snares Cisco Money What does this investment say about the ultimate role of big, centralized-network-intelligence devices like the CRS?
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