When you receive an announcement that says that someone has sold something to somebody, and yeah it’s very good, but there’s no more information than that, it raises your hackles. So with hackles raised, initially at IPTV middleware outfit Orca for sending out the statement, that was clearly trying to tell us something, we sniffed around the IPTV market and a few contacts told us just why Orca had been reluctant to tell us just what deal it has cut this week. This is a deal which starts with 50,000 middleware IPTV licenses and could go as high as 400,000 of them. If this happened it would make it one of the biggest IPTV installations in the world.
And this is just one of the deals that Orca has been trying to seal since it began partnering with Lucent, but this particular deal comes through partnership not with Lucent’s, but with its arch-rival Nortel, and is with Completel, a French ISP that is suddenly re-aiming its guns from the business DSL broadband sector to a flat out consumer play with a hybrid DSL TV service.
The deal is built around Nortel access technology, Sagem set tops and Orca and it was secret for at least two reasons. Orca is kind of ambivalent about whether or not Lucent should hear about the deal. On the one hand Orca is in the middle of about ten live bids with Lucent and it doesn’t want to upset them, but on the other hand Lucent has committed to transfer its affections to the in-house Telefonica Imagenio middleware.
In the middle of all of this Lucent is in merger talks with Alcatel, which itself has two competing IPTV middleware systems in its original OMP and the Microsoft system that is winning so many friends lately in US and European incumbent Telcos.
So Orca must feel, ‘How about that, you spend 7 years trying to get the attention on a company like Lucent, and turn them on to IPTV, and when they finally get it together and agree to take your product to market, at the very first deal, they agree to buy the customer’s product, instead of yours.’ So perhaps Orca didn’t want to upset this particular apple cart.
The other reason for it being secret is that of course Completel is about to walk into the very crowded French consumer IPTV market, and it will probably want to say when and how it is doing that not have its suppliers toll the world.
Of course Nortel, which to date has never completed a single IPTV installation, may also have wanted the deal installed and working before letting anyone else know it existed.
Hence the Orca statement that said, ‘Orca signs IPTV agreement with network equipment vendor with major service provider,’ which, let’s face it, is not exactly an exciting headline.
The deal is for an up front 50,000 Orca RiGHTv middleware licenses and professional services for a triple play service of IPTV, Video-over-IP and broadband internet access.
Competel is more or less ready to launch the service and in its last financial report said that its national backbone is commissioned and in service it has automated software for the provisioning of unbundled DSL lines with France Telecom and it has 200 DSL co-location sites in service, with the rate of additional site deployments accelerating.
That sounds like a pretty aggressive unbundling strategy and it’s the kind of move that created companies like Free and Neuf Telecom in France, that compete very well with the incumbent France Telecom.
But right now Completel has 2,300 enterprise DSL customers and is shooting for €240 million ($306 million) in revenues this year, and this is a completely new venture into consumer IPTV. But that’s a secret so Shhh, don’t tell anyone.
Just revisiting that Imagenio deal at Lucent again it occurs to us that taking an in-house software project that works, and turning it, in short order, into a working strategic package, is nearly impossible.
Back in the distant past we remember that IBM tried to do this at the Houston Oil and Light Company when it built one of the world’s first Transaction Processing monitors. Twenty years and many more installations later, IBM handed over the source code to a bunch of academics saying that support was impossible because they no longer knew what the code did. The academics reverse engineered it and managed to cut over 50% of the code out.
Had the people at Lucent been software engineers, they would probably never have agreed to convert someone else’s home engineered code into a major IPTV middleware package, but perhaps someone pointed out that ‘By the time we need to make it work we’ll probably be part of Alcatel.’
Our guess us that by the time the Imagenio code is re-written, it will look at lot like Orca’s RiGHTv.
Meanwhile, just to prove this type of thing is not uncommon, we also have ECI Telecom statement this week saying that it has been named the sole broadband access supplier for one of the leading ISPs in Europe and has already put in $20 million in ADSL lines. Answers via email if you can guess which this one is.