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SeaChange Ships Some Server Costs Overseas

SeaChange International Inc. (Nasdaq: SEAC) has shifted the bulk of its hardware-related development to China and the Philippines, the company announced during Thursday's earnings call.

Why this matters
It's no secret that SeaChange, as it transforms itself into more of a software company, would like to unload its server business -- but only for the right price. In fact, this has been a source of consternation among some investors, because the company has already turned down one offer. SeaChange instead moved ahead with a reorganization aimed at trying to turn servers and streaming gear profitable.

An outright sale is still possible; CEO Bill Styslinger said the move to China and Manila could "provide life to these product lines for our customers and, potentially, to some future buyer." In the meantime, SeaChange is growing increasingly focused on software, including middleware for set-tops and a new cross-platform video backoffice called Adrenalin that's coming into play as SeaChange gets pressed by a newcomer called BNI Video .

SeaChange has not announced any takers for Adrenalin or any service providers that are migrating in the direction of the vendor's new TV Everywhere-focused backoffice, but Verizon Communications Inc. (NYSE: VZ), Virgin Media Inc. (Nasdaq: VMED), and Comcast Corp. (Nasdaq: CMCSA, CMCSK) are among its higher-profile service provider customers.

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— Jeff Baumgartner, Site Editor, Light Reading Cable



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