Saturday, May 14, 2005

Alcatel realigns its IPTV strategy

Just when things are hotting up in the IPTV market, in a rather interesting move, Alcatel has decided to stop the further development of its IPTV middleware product, the Open Media Platform (OMP). Instead, it will concentrate on “system integration” mode and will sell Microsoft’s IPTV middleware exclusively.

LightReading reports that:

Alcatel (NYSE: ALA - message board; Paris: CGEP:PA) is abandoning the further development of its IPTV middleware product, the Open Media Platform (OMP), and has agreed to sell Microsoft Corp.'s (Nasdaq: MSFT - message board) product exclusively, according to several industry sources.

Alcatel has delayed a scheduled “next-generation” upgrade to the OMP while it hammers out its IPTV middleware partnership with Microsoft Corp. (Nasdaq: MSFT - message board), a source close to the situation says (see Alcatel, Microsoft Confirm IPTV Deal).

Looks like Alcatel is being smart enough to tem up instead of fight against with Microsoft. So far Telecom has been mostly out of reach of Microsoft. But IPTV technology will probably be the beginning of a new chapter in Telecom where vendors always stole a march with mind-boggling numbers.

My guess is that with Microsoft entry, IPTV market will probably be reduced to a commodity server market. Microsoft has turned the core of the IPTV offerings into a Client/Server architecture and has already won major deals and poised to dominate the market. On the other hand, the “end-to-end” offerings from the Telco equipment vendors are yet to prove their worth. Excluding some major wins by ZTE, other vendors have not yet announced major deals.

In such a scenario, it makes sense to be with Microsoft’s side rather than fighting with it. So, no wonder that Alcatel has chosen to be on Microsoft's side.

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