Monday, July 2, 2012

Vidyo's algorithm does away with costly video-conferencing hardware

All the companies which have bought expensive video-conferencing systems are getting ripped off. At least that's what Vidyo would have you believe. The key difference between Vidyo and the Ciscos and Polycoms of the world is that Vidyo claims its algorithm on the back-end does away with the expensive hardware set-up required by the competition.

For most multi-party video calls - that is with more than two end points chatting - vendors sella multipoint control unit (MCU) that is used to bridge the connections. It sits on the back-end, and decodes the multiple streams that come in, in order to display the consolidated grid of participants.

Industry leaders such as Cisco, LifeSize, Polycom, Microsoft and Avaya require MCUs for their multipoint video calls. Marty Hollander, senior vice-president of market development with Vidyo, told BizIT that the firm's main value proposition is that it has replaced the MCU with its video-encoding architecture, allowing customers to run on commodity hardware what a pricey MCU would do. This cuts down on costs, and the "virtual MCU" is also able to be run on virtualised servers owned by companies, completely doing away with the need for additional hardware, he added.

The introduction of an overhauled video transport mechanism on the back-end has come at a time when the increased number of mobile devices tapping in is putting additional strain on the hefty MCU, said Mr Hollander. The central MCU has to decode all the different participants video streams, encode them into a single stream of video content, and send out that content back to each device, he explained. Multiple end points and different video qualities from mobile phones to tablets, laptops and desktops theoretically add much more computing strain on the MCU which needs to work to ensure zippy performance.

Vidyo's customer reference, My-din in Malaysia, was at hand to back this up with some figures. Its IT director, Malik Murad Ali, said the retailer went with Vidyo because the final purchase ended up at about 5 per cent of the cost of the competition. It took less than 200,000 ringgit (S$79,665) to get my video conferencing up. A (colleague) who runs IT for a bank spent about 9 million ringgit.

Making big firms take notice
It seems Vidyo is shaking up its market quite seriously. In 2010, the then five-year-old start-up struck up an agreement with Hewlett-Packard (HP) to allow HP to sell Vidyo's technologies as part of HP's own high-end Halo brand of video-conferencing. While the companies didn't comment on whether this would negatively impact HP's ongoing relationship with video player Polycom, the latter ended up acquiring HP's video business the following year.

This was seen by some as a reaction to Vidyo. Vidyo CEO and co-founder, Ofer Shapiro, said to reporters in 2011: "It was clear that Polycom had to make a defensive move because Vidyo was beating them inside of HP so the company spent US$89 million to stick their finger in the dike." Other vendors have been keen on Vidyo as well. Philips said in April it will work with Vidyo to get its video algorithm into medical applications.

Last month, Juniper Networks invested an undisclosed amount in Vidyo. Video tends to place a heavy load on back-end networks, and Juniper could be interested in using the algorithm to lighten the load, or bundle something to customers running on Juniper's equipment. Mr Hollander noted that the Google Plus Hangouts Web chatting service uses Vidyo. Google licensed the company's technology to run on its hardware and built it owns front-facing client around it. Google service provides video conferencing accessed through a browser. It allows users to keep a video stream active, while new users can join in and drop out at any time from a link.

Vidyo is still a comparatively minuscule company compared to the juggernauts it is both working with and posing a threat to. The firm doubled its headcount last year to just 200 employees, according to reports. Originally called Layered Media, the firm's main engagement with the industry was in licensing its technology to OEM (original equipment manufacturer) customers. It was in 2008 that the company renamed itself and started marketing its own products. In september last year, it raised a US$22.5 million Series D round of financing. This adds to its total of US$97 million since being founded in 2005. And in April this year, Vidyo reported an 82 per cent increase for fiscal 2011, with a boost of 115 per cent in both North American and Asia-Pacific markets.

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