George, Nice to see that ANCR has a small switch ready if that is what some sellers want. Since you mentioned Pluto, here is an older piece about how the Video biz is trying to be more like the networking biz...
Changing Video Market Will Lead to More Partnerships
------------------------------------------------------------------------
November 3, 1997
Expect the latest round of partnerships among pro video manufacturers to continue for the foreseeable future as the industry more closely matches the patterns and machinations of the computer industry.
The trend is leading to major opportunities for small manufacturers in particular because they no longer need to look at their larger brethren as competitors, but as potential partners capable of producing huge product orders.
"The video industry is adopting the competitor/partner model of the computer industry," said J. Michael Brinkman, director of strategic business development at Panasonic. "We've seen many companies in the communications industries work together, share technology and develop open systems and interoperability. It's worked well in the computer industry, and we think that model applies to video."
All of the top manufacturers have long been committed to open systems. But up until this year, the industry trend was to accumulate all facets of the video process to offer customers a full integrated facility.
That method began to crumble earlier this year as Panasonic, Avid Technology [AVID], Sony and others suddenly announced they will partner with their rivals to provide joint systems to customers.
Market Research
"When we went to our customer base and talked in detail, there was a lot of hesitation in putting all their eggs in one basket," said Blair Wheeler, head of product marketing for newsroom systems at Avid. "Our approach then became: _let's look at this process and identify what the areas that Avid can add the most value.' What pieces can we own or have a dominant position and how do we create products to have open hooks so they sit nicely with other vendors' products?"
Avid concluded that its main strengths were in the area of content creation - non-linear editing systems, graphics manipulation and anything else that is used to turn raw footage into a completed story.
Clearly, the company will still stress its AvidNews playout and server technologies, but is willing to concede that it will sometimes lose sales to partners such as Pluto and Silicon Graphics [SGI].
But what has changed? Why does it suddenly make sense to get in bed with companies that could end up eating into your marketshare?
Two-Way Street
The thing to remember is that partnership deals are a two-way street. If a competitor/partner gains a piece of one of your contracts, you may be able to grab a piece of their's. The thinking is that gaining a small piece of a large market is more lucrative than owning all of a small market.
Major Partnerships
Avid
Pluto - developing a DV-native multichannel server for the NewsCutter Panasonic - providing its DV format for editing and playback solutions Intel - providing its chip architecture for content creation products SGI - provides platforms for a range of products, such as the new Titan animation system Apple - provides platforms for a range of products, such as the Media Composer and MCXpress Informix - developing asset management solutions
Panasonic
Avid - developing DV-native news editing and playback systems Gennum - developing a 540 Mbps SDI chip Matrox - developing DV/DVCPRO systems like the DigiFusion PCI controller Pluto - developing DV-native servers Quantel - will implement DVCPRO on future products Truevision - has developed DVCPRO versions of the Targa 2000 RTX board
Other partners include Microsoft, Pinnacle, SGI, Snell & Wilcox, Tektronix, Interactive Images
Sony
Fast Multimedia --licensing the QSDI interface Truevision --licensing the QSDI interface
"It's a big pie out there," Wheeler said. "There will be cases where we will bring others into an Avid turnkey system. But there will be other cases where someone will want an Avid product as part of another manufacturer's project. We'd rather not be excluded entirely from any particular site."
Another factor driving this trend is the open nature of desktop computing systems that many video manufacturers are writing to.
"Everyone wants open systems that can be networked together," said Neal Weinstock, principal of Weinstock Media Analysts. "Up to now, it's been difficult for computer platforms to handle the bandwidth required of professional quality video. As more general computer platforms accommodate video bandwidth, the video industry will become much more like the compute industry, and that means partnering and open systems."
Building on an open platform is only the first step toward creating an effective partnering program.
The more crucial component is the digital interface, the hook that allows one device to share data with another. This usually involves a cross-licensing agreement, such as we've seen between Panasonic and Quantel.
Know When to Hold 'Em
The trick, according to Brinkman, is to forge an agreement that does not expose proprietary technical information.
"You can do a lot of things on a non-disclosure basis," he said. "That doesn't mean your partner has to know all the intricacies of a technology. You can work with people without disclosing 100 percent of the technology.
"Still, it's not a mild commitment to work with competitors at this level," he added. "Let's face it, they are getting the benefits of years of our research and development."
So far, Panasonic and Avid are farthest ahead of all the major video manufacturers when it comes to partnering. Sony and Tektronix are adopting open technologies, such as MPEG and Windows NT, but neither has produced the range of alliances that Panasonic and Avid have.
More Deals Ahead
Late last year, Tektronix was still in acquisition mode, having purchased Dynatech NewStar in October 1996. Sony, meanwhile, says it will soon announce takers for its SX Partners program, although it was unclear at presstime if the company had released chipsets to potential OEMs.
The computerization of professional video makes it unlikely that manufacturers will return to the one-company-fits-all business approach.
"If you look at the pace of technological change today, and if you look at the various technologies required to put together a total system solution, for one company to say that they have the finest software, hardware, disk and tape technology would be the height of pretentiousness," Brinkman Changing Video Market Will Lead to More Partnerships |
