Summary:

Microsoft (NSDQ: MSFT) has had some trouble selling its Mediaroom IPTV platform to smaller service providers because of the cost but it’s ho…

imageMicrosoft (NSDQ: MSFT) has had some trouble selling its Mediaroom IPTV platform to smaller service providers because of the cost but it’s hoping that a new offering will help change that. The company said Wednesday that operators will now need far fewer servers to offer Mediaroom to their customers. Microsoft isn’t breaking down the savings for the typical telecom company, but it says that up to six times fewer servers will now be needed to deploy the service.

Mediaroom’s Jonathan Usher tells paidContent that Mediaroom now has three million subscribers, up from 2.5 million in February, making it the most deployed IPTV platform in the world. But Usher says that many of the subscribers are concentrated among large carriers, such as AT&T (NYSE: T), which alone has 1.3 million.

Analysts said that the number of servers required to deploy Mediaroom had been a barrier to the service’s adoption. Mediaroom requires more servers to deploy than rival offerings, said Jeff Heynen, an analyst at Infonetics Research. “Tier-two and tier-three operators — they didn’t have access to (them) when you factor in the number of servers that Microsoft was requiring at the outset to do things like fast channel change, video-on-demand, all integrated features they bundle together,” he said. “For a large operator that was gong to scale up to millions of subscribers it made sense; for smaller operators — 5,000, 10,000, a few hundred thousands — when you factor in the high initial capital cost and possibility of a long time to recuperate investment it was a little daunting.” Michelle Abraham, an analyst at In-Stat, added that without going after smaller service providers, “there was not going to be a whole lot of room (for Microsoft) to grow” beyond the big telecom companies.

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