Video services

Microsoft Wins at BT

Microsoft Corp. (Nasdaq: MSFT) landed another big carrier deal this week as British incumbent BT Group plc (NYSE: BT; London: BTA) said it will throw in with the software company for its upcoming video-on-demand deployments (see BT Chooses Microsoft TV).

BT says it was working as a participant in Microsoft’s “Early Adopter” beta site program for the past eight months. In fact, the carrier has long been kicking the tires on IPTV systems (see BT Puts IPTV to the Test).

But why Microsoft? And why now?

Andrew Burke, CEO of BT Retail's BT Entertainment division, says Microsoft had the most complete solution and it offered a real differentiation from the U.K.'s current cable and satellite TV offerings.

“We had several integrators in who were trying to piece together an IPTV solution, but only Microsoft had a true end-to-end product,” Burke says (see IPTV: Microsoft's Window to Carriers). “When we looked at it, what was exciting to us, and what resonated both with us and with Microsoft, was that we don’t believe TVs will stay as TVs, PCs stay as PCs, handhelds or whatever. Convergence and new product development will push us to deliver a converged solution, and I think Microsoft is so far ahead of the competition in terms of thinking that way."

BT plans to begin trials in early 2006, with commercial service delivery planned for the summer of 2006.

Microsoft’s IPTV platform is still a work in progress and is completely untested in large commercial rollouts, yet the software giant has been particularly adept at winning large deals with operators facing competitive pressure from cable and satellite operators (see SBC Awards Microsoft $400M IPTV Deal ).

Also, BT's confidence in Microsoft comes at a time when the industry skepticism about IPTV and Microsoft has been intensified by slowdowns at Swisscom AG (NYSE: SCM) and Australian operator Telstra Corp. removing itself from Microsoft’s Early Adopter program for reasons unspecified.

In the U.K., BT will be facing Rupert Murdoch’s dominant BSkyB satellite service and cable operators NTL Group Ltd. (Nasdaq: NTLI) and Telewest Communications Networks plc (Nasdaq: TWSTY), but Burke denies BT's motivation is competition. “We are targeting people that are not taking Sky and have not taken cable; now there are 14 million homes today that have no form of pay TV, no form of on-demand content, so there is a significant market out there for -- for want of a better word -- cable and Sky ‘refuseniks.' "

Microsoft's competitors, however, have different ideas about BT's needs. “I think that deal was really about one large company wanting to do business with another large company in spite of the fact that the technology is not quite there yet,” says Mauro Bonomi, CEO at middleware player Minerva Networks Inc.

“I think BT just said ‘I don’t care about the challenges I’m hearing about the Microsoft platform, because I’m making my move right now and we will launch the service in twelve to eighteen months, but by that time Microsoft will have the challenges worked out.' But even when they do get it worked out, will the technology be scaleable or will it require a lot of expensive hardware? That is yet to be seen. Will it be a flexible and open system? It’s unlikely.” (See SBC, Microsoft Defend Lightspeed and Swisscom IPTV Stall Sends Shivers.)

BT's Burke says Microsoft's Early Adopter program put to rest any concerns the operator had. “We’ve done extensive evaluation of the product itself, and we are absolutely convinced it is the right technical solution; and by launch time, which means in the middle of next year, we have no doubt whatsoever that this product will deliver for us.”

— Mark Sullivan, Reporter, Light Reading

konafella 12/5/2012 | 3:08:57 AM
re: Microsoft Wins at BT Seems to me the vast majority of press the Minerva CEO gets is from bad mouthing MSFT's product and customers.

Perhaps he ought to focus more effort and attention on why he is losing these deals instead of criticizing the selections made by his potential customers.

Am I the only one who sees this?
Spitzerman 12/5/2012 | 3:08:55 AM
re: Microsoft Wins at BT Seems konafella has a burr under his saddle from an industry knat!

Has he taken note that Bonomi's quotes recently are solicited from a press primarily reporting less than positive MS news in the Tier 1 space?

Ask Fortune 2000 CTOs how they feel about MS' grip on their family jewels.

Me thinks konafella dost protest too much.
Spitzerman 12/5/2012 | 3:08:54 AM
re: Microsoft Wins at BT Geez kona.........First you say you have a lack of respect for him but then identify him as an "esteemed leader"???

See this quote. If anything he's almost defending MS when he could be attempting to crucify them for barely supporting 10 subscribers on a single server in the SBC trials.

So does compression really matter???...LOL

SBC's TV project isn't happening at 'Lightspeed'
SBC, the telecommunications giant, calls its planned television service, "Project Lightspeed."

"...Unfortunately, its introduction is not living up to the name....
....But getting the SBC service up and running has proved to be an enormous challenge. Some overseas carriers that are using Microsoft's software in their networks have run into deployment problems, which could hint at future problems for SBC...
...For Microsoft, which signed a 10-year, $400 million deal last year to supply SBC with the complex software needed to deliver television via broadband lines, the technical problems have been an blow to its longstanding effort to break into the home entertainment business....
...Analysts, however, say Microsoft may be encountering problems substantial enough to affect SBC's plans.
Last month, Swisscom, a Swiss carrier, delayed the commercial introduction of its IPTV, which stands for internet protocol television, using the Microsoft technology until 2006, instead of the latter half of 2005. The company said that some of its technology was not ready to be delivered to a mass market, though it did not single out Microsoft as being the source of the problem.
But some industry analysts said sound and picture quality were poor on Swisscom's IPTV. Graczyk of Microsoft said that Swisscom's problems had more to do with the complexity of integrating IPTV with a variety of other products, including set-top boxes and digital video recorders.
Other industry experts, like Mauro Bonomi, the chief executive of Minerva Networks, a maker of IPTV software for small telecommunications companies that is based in Santa Clara, Calif., said that if Microsoft was having troubles, it might be the result of its efforts to deliver many sophisticated features over Internet lines that were not fast enough...."

http://news.com.com/SBCs+TV+pr... 3511.html <http: 2100-1034_3-5763511.html="" news.com.com="" sbcs+tv+project+isnt+happening+at+lightspeed="">

Bonomi continues to rally around the need for "Open Systems" in this space. Is he on an island with that statement?

Pot Shots?

Again...........me thinks you dost protest too much???</http:>
konafella 12/5/2012 | 3:08:54 AM
re: Microsoft Wins at BT Checked under my saddle - no burrs found.

Trust me, I'm no great fan of MSFT either. But I really have a tremendous lack of respect for esteemed leaders who take pot shots in the press. Having monitored this space for a few months now, this guy seems to be one of the finest in that regard.

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