Wowza must be the largest streaming company that few people in our industry have actually heard of, which raises the question, “Does it matter what you call a company?” Well sometimes it probably does. We were talking only for the second time ever to Wowza this week, about recent announcements and it’s one of those names that you tend not to take as seriously as it perhaps deserves.
But this is an 11-year old company, which is in profit and in growth, in the exceptionally tough video streaming business, so it deserves better. The name Wowza conjures to us a circus caller, gathering crowds to see something amazing, and back in 2005, when the company was founded, what Wowza did must have seemed pretty amazing. It was the first company to jump from offering Move Networks style IIS streaming, to offering all the different types of streaming in a single software platform.
This week its announcements were all about GoCoder and the release of its new SDK so that organizations can manage more complex workflows to create live video streaming from an iOS or Android device and it added support for 4K.
Already it points out that Periscope uses Wowza and that it is also used in drones and to report live sporting events (which is where Elemental started).
But today being able to take a single stream and from it transcode multiple video densities and then package them for the 4 major ABR formats, has become table stakes. It appears that everyone can do it.
But actually that turns out not to be true, as we found out when we talked to Chris Knowlton, a VP and the team’s evangelist on the subject of streaming. It turns out that quite a few of them sign white label deals with Wowza and simply take a license rather than re-invent the wheel. The company claims to drive 25% of the world’s live streaming, though we don’t know how it arrives at the number.
You can’t help thinking that its “white label” strategy was a great way to bootstrap the company on less funding, leaving the founders with more equity, but sometimes, once you get to 100 employees as it has now, it is perhaps time to shift over to direct sales, and go after tier 1 accounts. Wowza is on the cusp of such a move and its recent announcements regarding its GoCoder SDK, perhaps point to a gradual shift in that direction.
To us this means that Wowza has an identity crisis and it should either change its name, get a new outsider CEO or sell itself to someone bigger. It won’t thank us for saying so, but otherwise there is a danger that it will continue to “hide its light under a bushel,” as the saying goes.
Knowlton, came out of working at Microsoft where he was the IIS program Manager, at the time the company worked with Move Networks, the founder of the Adaptive Bit Rate revolution.
Move went bust because it wanted to get paid in patent licenses, and eventually its IPR ended up in the hands of Dish Networks. Today Wowza has its own patents, 19 and counting, and it would be naïve to think that there is only one way to go about streaming. It would also be naïve to think that a smallish company could ever go after companies like Apple which simply copied the ABR streaming protocols and have never paid a penny to anyone in license fees. For a company that claims to embrace and endorse innovation, Apple copies an awful lot of company’s ideas and pays them nothing, but that’s another story.
But it was moves like that of Apple which showed that Move had gone down the wrong route and companies like Wowza had gone the right way about things, and while companies like Move foundered on this, companies like Wowza just wrapped basic streaming into easy to use software tools and set about gathering as many consumer customers as possible.
Wowza today claims 19,000 separate customers, but when we look down its corporate clients, there are only a handful of operator names that stand out, among them Telefonica and Swisscom, although it turns out that the Wowza engine can be found in projects run by Cisco, Kaltura, and even by encoding firms like Elemental and Harmonic, even though each of these have their own ABR packager today. Sometimes, when a product is cheap enough and has a technical reputation, it makes sense to use it, because it is white label – no-one is duty bound to give Wowza any credit or its inclusion. As we said before, if it had a more corporate sounding name, it might get more credit.
Knowlton told us, “There are very few suppliers out there who don’t use our streaming engine in some form.” Whereupon we reminded him companies like Harmonic had made very early moves into this market, when it bought Rhozet with its Carbon Coder, and Elemental has launched its own Delta server, and he counters “We have customers which use Harmonic for encoding but use Wowza for streaming. Same with Elemental.”
What about giants like Cisco? “I’m not sure, but they have certainly used Wowza on an OEM basis.”
Wowza effectively offers four products, the streaming engine on a server and separately in the cloud, an encoder product that runs on phones and tablets, and a streaming player. It also has other tools which are dragging it more and more into the professional market like its workflow tools and its central configuration manager.
“OVPs can offer live streaming with no infrastructure at all or can offer it under a server license, either PaaS (Platform as a service) or SaaS (Software as a service). You just need an encoded stream and we now offer one in GoCoder outputting H264 AAC and once that is delivered then Wowza transcodes it and streams it. We can even encode on the Apple Watch,” he added.
“Our software works with general purpose DRMs like PlayReady or Widevine but for some reason not with Adobe DRM, because it won’t license it to us or to anyone.”
Up in this more elevated part of the market Wowza has around 900 server customers and it has just started to use an outbound sales team, although most deals come on the back of webinars and follow up calls right now.
In our mind there is now a gap at the top end of the encoding market created by market consolidation, and given that GoCoder has been around long enough to create video streams of sufficient quality, out there on the handset, maybe it is ripe to begin challenging on the server side if it chooses to adjust its business style. Let’s face it the encoders in the Ambarella chipset embedded in cameras became the basis of at least 3 major HD encoder ASICs.
Elemental Technologies is still running as a separate company from Amazon AWS, but Envivio will be swallowed up into Ericsson and it is likely the same will happen to Thomson and Harmonic. These companies are known for their execution, but they are not known for keeping their R&D at full throttle and innovation will have to come from far fewer sources in the market.
That’s usually when VC companies pile in and look for clusters of expertise and try to outguess the market and throw money at the next encoding problem. Could Wowza spawn one such business? If not VCs might go hunting for staff which understand adaptive bit rate well enough to steal them.
Knowlton almost (but not quite) acknowledges this, but insists that the company wants to continue to eat the market from the bottom up, from smaller customers going upwards, but companies who eat the other way around, going after tier 1 clients, as Elemental did with its encoding strategy, tend to end up richer and better known. We wish we could say we sense that the tide is turning at Wowza but it dreams of scale coming out of the GoPro revolution, one individual at a time and the bulk of its revenue comes from encoding on iPhones which is transported it to a Wowza engine to stream, and charging as little as $15 a month.
It is very similar to the story around Anevia’s Viamotion. This tool claims to be inside lots of other white label packagers too. “Who,” says Knowlton, not quite getting the irony of why he does not recognize a company with a similar bottom up strategy to his own.