Myrio's Quiet Quandary
“We just have not been as vocal nor put a marketing program around trial software and trial deployments like Microsoft has with the Early Adopter program,” says Myrio VP of product management Ryan Petty. [Ed. note: No relation to Tom, Richard, or Kyle.]
Myrio, now a Siemens AG (NYSE: SI; Frankfurt: SIE) property, says it has more than a dozen IPTV trials in progress with Tier 1 carriers, three of which are in the U.S. (see Siemens Snaps Up Myrio and Siemens Gears Up for IPTV). Its largest announced customer to date is Belgacom (Euronext: BELG).
And while Myrio keeps its customer names quiet, the company doesn't mind taking aim at Microsoft's Early Adopter program, calling it a tool for big carriers -- all public companies -- to test the IPTV waters on Wall Street.
Microsoft’s Early Adopter program allows new telco TV clients to act as beta sites for development of Microsoft’s TV IPTV Edition platform. Microsoft says the program also allows carriers to slowly ramp up their deployment size and experiment with various service packages.
“Microsoft came in and did a very smart move with the Early Adopter program,” Petty says. “It gave these Tier 1s the cover they needed to trial IPTV in a more public way and be able to determine whether Wall Street would punish them for making announcements about major new investments in their networks.
“Certainly if you go to Wall Street walking hand-in-hand with Microsoft -- talking about these new investments you’re going to make in the digital home -- and certainly having Microsoft’s perspective on that [is] a good move. That validates or lends credence to what they are saying...
"Our goal was not to wait until a lab at a place like SBC said the technology was ready," Petty adds. "We wanted to prove that it is technically feasible and that it can be a market success, and we have done that with our smaller operators." Myrio says it now has 70 customers worldwide, mostly IOCs.
Microsoft doesn't agree with Myrio's characterization of its Early Adopter plan.
“There was no Wall Street element to it,” says Microsoft TV director of marketing, Ed Graczyk. “There was no conscious thing to build EAP to try to impress Wall Street -- I think it was just sort of the icing on the cake...
“There’s been a lot of interest from Wall Street,” he notes, but Microsoft has not been aggressively seeking that attention. “I think Wall Street is by and large pretty bullish on IPTV and the role it can play in transforming that industry."
Analyst John Hodulik, who covers SBC for UBS Investment Research, believes Microsoft's Early Adopter plan hasn’t swayed investors. “I would say that in general they are wary of the [SBC IPTV] plan, and that has not been affected by Microsoft’s participation or lack of participation.” (See SBC Awards Microsoft $400M IPTV Deal .)
“Investors may feel a little bit better that selecting one vendor for an end-to-end solution might mean that implementation will go a little bit easier,” Hodulik says. But “they [Microsoft] are also known for vaporware, and the new releases of their software are often delayed... Frankly I don’t think the IPTV plans are having any effect on valuations yet; I think it will, once it starts affecting cash flows."
Microsoft has now announced IPTV trials at several of the world's largest carriers, including SBC, BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), BellSouth Corp. (NYSE: BLS), and Reliance Infocomm Ltd. (See BellSouth Trials Microsoft's IPTV, SBC Awards Microsoft $400M IPTV Deal , Telecom Italia Trials IPTV, and Verizon Attacks Video's 'Biggest Barrier'.)
But by talking about plans early on, and publicly, Microsoft has put itself under the microscope. “For most of these customers, they’ve gone forward making announcements with Microsoft," Myrio's Petty says, "So it's now up to Microsoft to get these products working so that these customers can go commercial.”
Despite reports of problems at SBC and Swisscom AG (NYSE: SCM), Microsoft says its IPTV solution is progressing as planned toward commercial, mass-market deployment (see SBC, Microsoft Defend Lightspeed and Swisscom IPTV Stall Sends Shivers).
“We have operators in North America, operators in Europe, operators in Asia/Pacific,” Microsoft's Graczyk says. “So the goal is to have a product offering that reflects the broader requirements of the market but also to convert those customers into deployments for IPTV services.”
— Mark Sullivan, Reporter, Light Reading