When Instagram added video 7 months ago it was a wake-up call for many service providers, who immediately found their networks faced with exploding demand for mobile video. Now operators face the threat of much larger video downloads, as millions of Netflix customers migrate to mobile, and Amazon reportedly plans its own over-the-top video streaming service.
It’s all good news for the software developers who provide video optimization solutions for carriers. This month, the market’s #3 player Flash Networks announced plans to acquire #2 vendor Mobixell, creating a combined company that will be the largest independent vendor of video optimization software. The combined company’s largest competitor is ByteMobile, owned by Citrix.
“The driver for us acquiring Mobixell is the fact that we were the two largest independent competitors in this space and the synergies are tremendous,” said Flash Networks CEO Liam Galin. “There is zero overlap between the carriers that each of us has on its roster of customers. So that’s one synergy.”
Galin said the merger will result in a slight workforce reduction, but that most Mobixell employees will find a place at Flash Networks. “We are basically addressing the same needs of the carriers with slightly different technologies, which means that we can now take the same headcount and do almost twice as much because we don’t need to develop competing products with each other,” he said. “If one gains an advantage in a specific area of video optimization, the other has to immediately develop that functionality in order to close the gap. That no longer exists.” The Flash/Mobixell merger is scheduled to close at the end of January.
Video optimization is becoming a buzzword for carriers, but Galin notes that it is just one part of mobile Internet optimization. “If you look at spikes, … it can be downloads, it can be pictures, it can be audio, it can be various types of traffic,” he said. “That’s why you need to have a holistic view of optimization.”
“Video optimization has another side to it which is as important and in some cases even more important, and that’s acceleration,” said Galin, noting that all carriers compete now on network speed. “We’re showing substantial numbers of acceleration of between 20 – 150% … and that has nothing to do with the video or the downloads or the content itself. We extract it from the TCP angle, trying to make the network more efficient.”
Infrastructure vendors like Cisco and Ericsson are also keenly focused on mobile Internet optimization. Ericsson has worked with Mobixell in the past, so Galin hopes that going forward the company will be more of a partner than a competitor. Giants like Cisco and Citrix remain a threat, but Galin is optimistic.
“This is just one product of the full portfolio these guys are showing; for us it’s our lives and livelihood,” he said. Flash Networks has roughly 30 patents in various stages, and it also has 250 partnerships with potential e-commerce partners, including several Fortune 500 companies.
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