Lower set-top costs and an open developers' environment are among the benefits.

As the IPTV market leader, Microsoft has taken lumps from competitors eager to chip away at its globally established position. But the head of marketing for Microsoft Mediaroom sees better days ahead for its service provider customers, both in terms of lower deployment costs and better features.

In fact, Christine Heckart, general manager of marketing for Microsoft Mediaroom, believes IPTV is at the same stage now as the Internet was in the mid-'90s — and poised to take off.

“People are just starting to understand; the tools are the most nascent and basic of tool sets,” she said. “But we can see the potential. With the Web, it took a good, solid five years. There will be applications and capabilities we don't even imagine now. The real potential is in connected TV. Broadcast brings the world to your TV; now you can take your living room to the world. It's a two-way street.”

Initially, that means something as simple as setting up a recording from one location, recording it in another and watching it in yet another. But there are many more features coming, she said. For example, in 2008, Microsoft will offer the ability to deploy one fully functional set-top box (STB) in the home and allow all the others to be lower-cost models, said Heckart.

“It's one of the benefits that I don't think is fully understood or appreciated,” she said. “You can put one expensive device in the house, and the others can be very low-cost nodes. You wouldn't do storage on them, but they would have full functionality to record stuff and to watch stuff.”

In general, IPTV STBs are at least $100 cheaper than comparable cable STBs, she said. Microsoft has lowered the cost of subscriber acquisition by using a system-on-a-chip and moving things into software that once were done with hardware, Heckart said.

Microsoft also has used its open-ecosystem approach to give its service provider customers “at least a couple of choices” of technology providers for other aspects of the system, such as encoders and servers, Heckart said. “We are using the same kind of technologies to scale IPTV as you use to scale the Internet,” she said. “So you can scale up in very dramatic ways, and you are continually riding down the chip and the hardware costs of the open ecosystem.”

There has always been the option to develop new applications for Mediaroom's browser, but now Microsoft has released an application developer's tool kit and an environment “to allow developers to create applications more natively,” Heckart said.

“This is an environment that is unique; it's not like cable or satellite,” she said. “We're not talking about hackers — you have to be willing to pay for a tool kit. Third-party developers can create and innovate on top of the platform. It's not a new idea, but nobody has been able to execute on it. We just had the first developers' conference [in October] in Boston, and the excitement is unbelievable. Microsoft knows how to open up and allow third parties to develop on its platform, and there is going to be enough scale behind these deployments to make it worthwhile.”

In fact, IPTV could hit new highs next year, she said. “People are only interested when there is a critical mass of eyeballs,” Heckart said. “We will be at that critical mass some time next year. This is not going to take 10 years or even three to five years. TV has been around; it's really about riding the subscription and demand wave, and we may be at critical mass for IPTV worldwide by next year.”

TELEPHONY'S GUIDE TO IPTV

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