Tuesday, August 22, 2006

Advanced services for the broadband access market

The growth of the broadband access market (that technologies such as 1/10 Gig Ethernet PON) cater to strong depends on the demand and popularity of advanced Internet services. The most popular and discussed service is TV/Video on Demand.

I am a huge fan of the on-Demand technology. My cable provider Comcast now provides select movies which can be ordered on demand. Some of them are free, but the free ones are usually the old classical movies. I guess Comcast would like to have every movie in its repository, but alas, the cable doesnt have enough bandwidth to meet the on demand request from every customer. So they hope that given the limited collection, only a small subset of its user base will request on-demand at a given time, by which they can afford to deliver this service over the limited bandwidth available.

More than video, I would like to have sports matches on demand. Tennis is my favorite sport. The US Open Series is on. However, ESPN telecasts only the one of the semi-finals and the finals live. However, all matches are recorded by television cameras. Wouldn't it be fun to have access to all matches live, so that I can watch whichever player I am a fan of, wherever he/she is playing.

So how about Video on demand technology. Ethernet PON technology is mature, although not yet vastly deployed. Video technology is mature. So the question is when can the two be integrated to make a commercially viable venture.

And we are not far away from this technology revolution. Today, Cisco bought Video-on-Demand server venfor Arroyo for $92 million. Last month, Motorola bought Arroyo's comeptitor for $186 million. The big players now see juice in this market. Which is great, because now the millions of dollars required for an intensive marketing effort to promote the technology and make it available to the masses so that it can be cheap and commerically viable is available.

And that is a huge developement for EPON chip vendors. For device technology matures very fast. But it takes services and software to catch up. Device vendors have to hinge their bets on this factor. So Cisco and Motorola taking keen interest in the video server market ought to be great news for Teknovus, PMC-Sierra, Immenstar and the others.

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