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BigBand scores big bucks for media router

BigBand scores big bucks for media router

Is BigBand Networks on to the next big thing in routing with its network edge media router?

VCs were intrigued enough to pour another $27 million into the Fremont, California-based firm, which produces routers that can move MPEG and IP content more efficiently over broadband networks.

New investors included Charles River Ventures, Lauder Partners and CommVest. All the company?s prior VC investors, Redpoint Ventures, Pilot House Ventures, Cedar Fund and Evergreen Investments, also participated in the round. The company has now raised a total of $57 million.

Context

It might seem that as bandwidth costs continue to decline, there would not be as much interest in the kind of bandwidth management BigBand is offering. But in targeting cable operators first with its BMR 100 and 1200, the company has found a ready audience.

Despite their propensity for slowly adopting new technology, Time Warner, Blue Ridge Communications, Cox Communications and Rogers Cable have actually installed BMRs in the field -- BigBand claims its products are routing MPEG and IP-based content in networks serving about 500,000 homes.

In contrast to Cisco?s view of a universe moving toward IP networks, BigBand decided to devise a router that could take media in its native format -- whether video, audio or data -- and dynamically allocate bandwidth to different services.

With cable operators moving to deploy video-on-demand services to customers, there is an increased need for tools that will allow them to map out bandwidth needs. Yet guesses as to how much demand there might be for a service can be wrong -- Time Warner?s first trial of subscription VOD in 2001 was a case in point -- and lead to system outages and customers unable to receive the content.

BigBand has found some early success because operators can allocate more bandwidth in real time to a service like VOD on a Friday night, and then reallocate the bandwidth to data services on weekdays during daytime hours to ensure a higher quality of service for broadband customers.

Cable operators looking forward to other services they might offer, such as HDTV, telephony and interactive TV, might worry about whether they have enough network capacity. BigBand?s marketing and product development has taken this into account.

HDTV, in particular, is going to be a hard service to manage because there will be a mix of standard definition DTV (anything below the 720p format) and HDTV showing at different times of the day. At an industry trade show next week, BigBand will show an application that allows operators to send three channels of HDTV, where before they could only do two with the same amount of network capacity. For SDTV, BigBand can help operators get between 14 and 16 channels in one 6MHz slice of spectrum, where they typically would get eight to 10.

Competition

While BigBand has a little lead on the competition right now, developments in a variety of different places could impact demand. In terms of its closest competitors, Terayon has a product that routes IP content over an MPEG transport. And SkyStream Networks, Grass Valley Group, Tandberg and others could decide to enter the space.

In the semiconductor space, companies like Xtend, Chinook and Navic Networks are developing chipsets that would open up more bandwidth on the cable network with the installation of new equipment.

On the client side, companies like Scientific-Atlanta, Motorola, TiVo, SonicBlue, Pace Micro, NDS and AOL Time Warner spinoff Myestro could evolve digital video recorders into devices that help manage bandwidth use.

"Some operators are trialing [on demand services] by using a set-top at home with a hard drive, and others are putting [time-shifting functions] at the network side," noted Amir Bassan-Eskenazi, BigBand Networks? president and CEO. "By being a horizontal bandwidth management solution, we can play on both sides of the fence," he said, noting that the focus right now is more on the network side.

Conclusion

With potential competitive threats from a wide range of companies and sectors, it will be interesting to see if BigBand can respond to market developments. Most of the threats won?t materialize for another year or two, though. In the meantime, the company has time and money to expand sales of its BMR devices to cable operators and into new markets, such as telcos. Eskenazi said it is already in some trials with telcos, but declined to offer details.


the451 (www.the451.com) is an analyst firm that provides timely, detailed and independent analysis of news in technology, communications and media. To evaluate the service click here.

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