FAST FORWARD

When Siemens acquired Myrio in April, it left Minerva Networks as one of the lone “independent” middleware providers for the telco video market. For some, that may have been a harbinger of doom, but according to Minerva CEO Mauro Bonomi, it has meant greater opportunity. Bonomi recently spoke with Telephony's Vince Vittore on the company's market position and the development of new applications.

On the need for tighter relationships with large system providers: You can identify three camps in this market. One is a captive solution. The first companies to do that were the access players. Alcatel did that in acquiring imagicTV and Third Space. The idea was that they could do it all. What we heard back then was telcos saying, ‘This is a double-edged sword. I like a complete solution, but I only buy 50% of my access from Alcatel.’ At the same time, [customers] felt Alcatel was a big company, and they liked dealing with big companies. UTStarcom is doing the same, and Siemens is approaching the market in a similar fashion. At the same time that Siemens made its move, Alcatel announced that they were taking a different tack — by embracing Microsoft. The second camp is Microsoft. Their approach is one where the upper-layer software is truly independent of the access. The third camp is an open platform environment. The middleware is the open-end system. You can plug and play any [conditional access] system. You can have Linux at the set-top box or even a proprietary system.

On Microsoft TV: The problem with that approach is really a bit of a closed system approach. It's very difficult to go with someone else for [digital rights management] or change the look and feel. There's a very interesting solution being proposed by Microsoft, though. They're demonstrating a very compelling client experience.

On the difficulties of open platform: The challenge is we're with more companies. The big guys need to work with a solution provider that they know. Nortel has a great system integration team. They're really bringing Minerva into large opportunities. We can act as the system integrator for smaller deployments, but companies that have more than a million lines want to work with a company like Nortel.

On international markets: We find that there are smaller operators where we can work with smaller local system integrators, and we are the subcontractors to those companies. When it comes to the bigger guys internationally, they're looking for global large system integration companies. Exactly the same approach applies to them that applies to the SBCs and BellSouths of the world.

On near-term application development: We see this market going through a number of different phases, and we're in phase one. Phase one is the one in which the carriers want to match the cable operators. The first challenge is to make IPTV as robust as cable TV. It hasn't been easy. We feel that we now have an advantage to create robust and reliable TV services. The proof of that is our customers are winning against cable companies, and the consumers feel the experience is compelling. [In phase two] you will see from Minerva applications like HDTV support, TiVo-like applications. The obvious requirement we have is the capacity to push more of the bundled services — the capacity where you have voice mail on the TV. Today we've got caller ID. About 80% of the subscribers tend to buy that service, and they're paying $3 per month.

On longer-term development: The third phase is where you realize that you have a very flexible platform and that every click you make can be tracked. The bottleneck then is the creativity of the content creators. You'll see that as more IPTV deployments reach a critical mass. As you have networks with 30,000, 40,000 or 50,000 subscribers, those types of networks become very attractive to advertisers.