Reality Check
Silicon Graphics Inc.
The Silicon Graphics Inc. video-server solution is the most conventional and was rated highest by the experts. The system is straightforward: multiple computers are connected to many fast hard drives. The server receives requests from users and transmits the video from hard drives to the user. While the experts think the result is solid, Healey points out that because SGI was "first out of the gate" with its VOD server, its system has also been the first to hit a performance wall.
SGI's Challenge XL server will be used for the Time Warner Cable trial in Orlando, Florida, which was scheduled to begin late in 1994 and will service a total of 4,000 homes. Customers will have a powerful set-top box, built by SGI and Scientific-Atlanta. Most experts criticized this particular set-top box for being too smart (and costly). As Alexander argues, a more efficient solution would be to "locate the `intelligence' in the central office." By offloading more of the computational burden to the video server, dumber and cheaper set-top boxes could be used.
Oracle Corp.
Oracle is trying to leverage the company's very successful database technology into the multimedia age with its Media Server. The Media Server software is really just a database that can seek and retrieve video and sound. Although the software is portable to other systems, it was designed with nCube Corp.'s Massively Parallel Processor (MPP) in mind. An MPP is a computer built of many identical processors in which each processor works independently on a piece of the problem. The result is a very powerful system, but not one well suited for video-on-demand, according to the experts we spoke to. Yencharis flatly states, "nCube is a fantasy." He argues that MPPs are too expensive and unable to handle the real-time interaction that is necessary for video-on-demand.
Nonetheless, this system is one of the few in use today - albeit on a very small scale. In the UK, British Telecom is using an nCube MPP running Oracle software to provide video-on-demand to up to 60 households.
Hewlett-Packard Co.
While most vendors are building video-on-demand servers out of general-purpose computers, Hewlett-Packard is combining a standard Unix computer with custom hardware. It calls the system the Video Transfer Engine. The server's front-end computer handles mundane tasks like billing and setting up transactions while the VTE handles the transmission of video streams. Yencharis says that this should be cheaper than Oracle's answer of throwing an MPP at the problem.
Hewlett-Packard has contracts to sell its system to both Pacific Bell and BellSouth Telecommunications. PacBell is waiting for regulatory approvals before starting up in four areas of California, followed by statewide service, while BellSouth is getting ready for an 18-month trial in Atlanta in mid-1995. Not everyone is convinced that BellSouth has the resources and technical chops to pull it off - especially as it will be facing competition from cable companies in the local telecom and video markets. Alexander predicts, "Time Warner will be delivering phone service long before BellSouth figures out how to deliver movies from a Hewlett-Packard server."
Microsoft Corp.
Always ambitious, Microsoft wants to provide the software necessary for the entire video-on-demand market. Its continuous-media server, with the code name Tiger, is not just for giant phone and cable companies. It can also be used by small businesses, such as real estate agencies, that want to display their wares. Tiger, like Oracle's Media Server, is software that manages and transmits video. However, instead of running on one powerful computer, Tiger will operate over a network of inexpensive PCs that share the load.
Right now, according to Yencharis, "Microsoft has a paper tiger on its hands." Tiger is still in development (Microsoft says it will be out the second half of '95). Of course, lagging behind and then wresting control of a market is standard procedure for Microsoft. And, as Alexander pointed out while reviewing the four systems, "with only one exception, none of these companies has any experience or feeling for what it takes to win in the consumer media markets. The one exception is Microsoft."
Reality Checkers
Bob Alexander
president of Alexander & Associates Inc., an entertainment and consulting firm
Thomas Healey
general manager of Electronic Highway Division, Andersen Consulting Canada
Len Yencharis
proprietor of The Yencharis Consulting Group, which specializes in high-technology markets
