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20 June 2007

Microsoft IPTV renamed, with new functions and new customers

Everything that has been written about Microsoft IPTV during the past two years has been uncomplimentary, so why would anybody in their right minds, especially the highly critical AT&T team, want to include the Microsoft name on the TV sets that finally deliver its U-Verse IPTV service. Which is perhaps why Microsoft has changed the name of its service and introduced the ‘ingredient brand’ of Mediaroom, so we can all forget the past and get on which a system which now works (if indeed it does).

The truth is that the word Microsoft is associated with, and has always been associated with, being an ingredient brand by consumers. Microsoft is the name of the software that you are forced to have when you buy your nice new Dell or Hewlett-Packard PC. No consumer had ever bought a Microsoft product on purpose until the company introduced the Xbox, and with that product it has begun to turn around its image as a ‘forced to have’ product line, and started to court the consumer directly. This will be a long courtship in our view and will need Microsoft to change a lot before it can be entirely successful.

But that aside the consumer knows nothing and cares nothing of the travails of the past few years, and Microsoft is now beginning to roll out the features that were seen at Supercomm three years ago, which is the vision that companies like AT&T bought into. These are the capabilities that genuinely make consumers sit up and say ‘I never knew you could do that on a TV,’ and they have been a long time coming.

But are they really late and is there genuinely a wind of change running through the Microsoft IPTV, whoops I meant Mediaroom, offerings

The new capabilities are in-home personal music and photo sharing, dynamic multiView (multiple picture-in-picture) capabilities and the creation of a Multimedia Applications Environment and development software for developers. The Multimedia Applications Environment allows the creation of video-on-demand portals, casual games and interactive TV services.

But the SDK for it is definitively a surprise. Microsoft is finally saying ‘You know what, you’re right, we can’t introduce all of the IPTV services we want to, solely under our control, why don’t we bring our big guns, our legendary developers, into play.’ In that statement the company is also proclaiming that its system is ready for prime time, and stable enough for other people to get used to the code, because it won’t change so often any more, at least not right in the guts of the applications, on the set top.

Developers will naturally be mostly those employed by telcos and they will begin their work focusing on interactive services using the Mediaroom Application Development toolkit.

One of the reasons that Microsoft’s IPTV is so often characterized as late is because it turns out that the software giant has always envisaged a gradual roll out function over two years, and perhaps that has stretched to three, but back in mid-2005 we revealed the timescale and it’s worth comparing those notes from back then.

We said that the first version would go live without high definition, and it did, we said that it would have no mosaic interface and be supported by only one or two encoders and one or two set tops, which it was, Fast channel change would be in the service from the start, but little else.

We said that in mid-2007, Microsoft would add the Mosaic EPG and the full function VoD, we just didn’t know it would be in the Mediaroom named release.

The reason that Microsoft kept insisting that its software was not late, was that quite simply most of the function was never intended for use before the middle of 2007, but that single fact has been why most telcos were left struggling to compete with native cable operators for function, instead of being able to pick up subscribers at a fast clip, keeping their shareholders happy.

One thing that may have changed in the Microsoft set up is the way it appears to be supporting a browser and xhtml in the latest set top release, in order to allow the development of core web style applications. We have asked Microsoft about this, but currently all the key people are a big trade show, so we might get more detail next week. Coverage from the show suggests that instead of a .Net client application only, a browser has been included in the set top so that internet based applications can be transported directly to the TV.

It was always planned that the second software release, was to introduce High Definition support but it was also supposed to add multi-room DVR as well so that is perhaps late. And it was clear that the chips which support multiple concurrent Picture in picture images would not come until the third release update, which was always scheduled for now and these releases would always be introduced in the US first and then later for European devices, with some delay in between because European services also needed to also support DVB-T digital terrestrial services, which were also added with this release.

We said back in 2005 that the final pieces of the Microsoft IPTV jigsaw were not expected to be put into place until mid-2007, when the much heralded Mosaic EPG, picture in picture and full function VoD, and possibly the ability to copy content to portable players would be introduced. Well we’ve got some of that now.

One thing that has changed this somewhat has been the arrival of Apple TV. This has meant the Microsoft has had to introduce what it calls Personal Media Sharing, enabling consumers to listen to digital music and view photos stored on PCs on the TV. How long before it adds the watching of video stored on Xbox and PC to be played on the TV ‘ oh that’s right, using the Xbox as a set top makes this possible already.

But after all of the difficulties in actually bringing these new features to market, now the proof of the pudding will be in the eating, and take up needs to accelerate dramatically.

Already Microsoft has two more design wins on the back of demonstrating code stability lately. It has added PT Comunica”es, one of the bigger Portugal based operators, using the software to power its IPTV commercial service Meo, and it will also begin trials with Taiwanese operator Chunghwa, already a leader in IPTV with around 249,000 IPTV customers, using a previous generation Alcatel system.

This deal came on the back of a deal signed with the company’s chairman after a visit from Microsoft Chairman Bill Gates, when they signed a letter of intent on an overall strategic cooperation in mid-May. It doesn’t mean for sure that Chunghwa will swap, but if the code’s stable now there’s no reason for it not to. The alliance was mostly about business services offered to Taiwan based businesses operating in Taiwan and China and new-generation operations systems and software.

The Chunghwa trial will run in June with 10,000 test users and it will decide whether or not to upgrade to it by August.

Alcatel-Lucent announced it has tied up PT Comunica”es, with a system that will manage 78 channels of broadcast TV, VoD, HD EPG and DVR ‘ no mention of the latest version there, more likely the currently stable existing feature set.

And if the new Microsoft IPTV organization continues to find itself in difficulties, or if Microsoft decides that IPTV is too operator cosy and what it really wants is to directly court the public on ‘over the top services,’ then Mediaroom has a nice sound about it for a spin out from Microsoft, and an abandoning of the entire, loss making adventure. We’re sure that someone in Microsoft has at least considered this.