The online video boom is bringing back the focus on hardware — specifically hardware that makes up the pipes and plumbing that brings these wonderful videos to our screens.
The reasons are pretty simple — the bandwidth prices have fallen far enough, and at the same time content delivery networks have lowered their tariffs to the level of a rodent’s den. But delivering video is still not cheap enough, and content owners have to find further ways to squeeze their costs. Hardware is the obvious area that needs improvement.
One company that has come up with a clever solution is Acton, Mass.-based startup, Blackwave which received a massive $16 million from Sigma Partners, Globespan Capital Partners and IDG ventures.
When it comes to web infrastructure, most companies typically buy boxes from different sources — storage systems from the likes of Network Appliance (NTAP) or Isilon (ISLN), for example; load-balancing gear from Cisco (CSCO), switches from Foundry Networks (FDRY) and servers from Hewlett-Packard (HPQ), Dell (DELL) or Sun (JAVA). They then try to build a bespoke solution, managed with specialized software.
Blackwave has basically taken all of the boxes, put them into one device and made the device good at one thing — delivering rich media content (loose translation: online video) as smartly and cheaply as possible. “We can reduce the hardware costs by a factor of ten,” says CEO Robert Rizika. Why? Because the system can adjust itself according to traffic needs — almost like pants that adjust to the size of the meal.
Let’s say, for example, that an online video destination is hosting a Britney Spears video clip. The system has allocated 100 concurrent users to stream the video when suddenly, it gets linked to Matt Drudge’s web site, and the number of people who want to watch the video balloons to 100,000. The system will automatically reallocate resources to that video.
Rizika declined to give details as to who is currently using Blackwave’s boxes, but he did hint that the three-year-old startup counts a social network, a media company, and a user-generated content web site among its customers. Some speculate that the media company might be NBC. They are hoping to get other media companies and content delivery network operators to buy its gear.
Despite their early lead, it shouldn’t come as a surprise that rivals would jump into the fray.