After years of reaching for the cloud separately, ActiveVideo and Zodiac Interactive are now working together to offer cloud-based video services and advanced user interfaces to a wide range of set-top boxes, both old and new.

ActiveVideo and Zodiac Interactive unveiled the partnership early Tuesday morning in advance of this week's IBC show in Amsterdam, which starts Thursday. They said the joint offering will combine the cloud virtualization capabilities of ActiveVideo’s CloudTV platform with Zodiac's PowerUp Stack software and AMS cloud platform, thus enabling pay-TV providers to deliver online video services and next-gen user experiences directly to their subscribers' set-tops, no matter how old and antiquated those boxes may be.

The two vendors also announced their first deployment of the joint solution, disclosing a deal with Cable Bahamas Ltd. in the storm-tossed Caribbean. Cable Bahamas, which delivers video service to about 250,000 set-tops in its area, aims to start rolling out the solution next spring. Its plans call for offering a video mosaic guide that displays live content from multiple channels, a unified experience across multiple devices and the ability to record and view content in any location.

The fresh collaboration between Zodiac and ActiveVideo is significant for several reasons. First, it pairs complementary cloud-based video services from two leading vendors, enabling cable operators and other service providers to deploy a pre-integrated solution rather than pick and choose different piecemeal elements and integrate them by themselves. In that sense, it represents a real reversal from the best-in-breed approach that the industry has been championing for several years.

"The industry is demanding these solutions, packages of solutions that use the cloud as a baseline," said Lakshmana Pamarthy, head of marketing and business development for ActiveVideo. With the pay-TV sector continuing to consolidate, he said, providers are once again looking for vendors that can offer more comprehensive, integrated services. As a result, ActiveVideo, which has been pretty quiet on the deployment front since its acquisition by Arris Group Inc. (Nasdaq: ARRS) and Charter Communications Inc. two years ago, is now seeking other partners to bulk up its offerings. (See VTR Taps ActiveVideo's Cloud Video Platform .)

Second, the deal formalizes a partnership between two companies that have been eyeing some kind of working arrangement for years and already have several major customers in common. Both ActiveVideo and Zodiac provide cloud-based video technologies for Charter and Altice USA in the US and Rogers Communications Inc. (Toronto: RCI) in Canada. But they have done that separately until now.

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Third, the new video service package is expressly aimed at Tier 2 and Tier 3 pay-TV providers that don't have the resources of a Comcast Corp. (Nasdaq: CMCSA, CMCSK) or Charter to develop and deploy the services on their own. In the US, for example, that means everyone from Mediacom Communications Corp. on down, which is a very sizable target market.

"You don't even need to deploy a truck," said Zodiac CEO Brandon Brown, terming it the "ultimate solution" for small and midsized pay-TV providers seeking to deploy cloud-based video services quickly and efficiently. "Now a real alternative exists." In North America alone, he estimates that the "massive" target market encompasses at least 200 million legacy digital set-tops that have already been deployed.

The two partners are looking to sign up two to four more new pay-TV customers by the end of the year, with more deals expected next year. "We're extremely optimistic going into 2018," Pamarthy said.

— Alan Breznick, Cable/Video Practice Leader, Light Reading