Vidyo Partner Newsletter
 
 
A Letter from Vidyo CEO Ofer Shapiro to Our Valued Partners
Competitors Follow Vidyo's Lead


Hello There,

Ofer Shapiro

Ofer Shapiro

CEO, Vidyo Inc.

These are very exciting times in the video conferencing industry as both the market and technology are evolving towards convergence upon personal and pervasive video deployments. This brief serves to update you with regard to Vidyo’s role and leadership position in accelerating the expansion of our market to a predicted $22B TAM by 20151.

Last week, Vidyo announced its contribution to a new video coding standard known as HEVC (H.265). HEVC is a next step in video coding and is currently under joint development by the ISO/IEC Moving Picture Experts Group (MPEG) and ITU-T Video Coding Experts Group (VCEG). The goal for this new standard is to cut in half the bit-rate required to deliver video of the same quality as today’s dominant H.264 codec. Vidyo’s contributions to the HEVC standard contain technical designs from 19 related pending Vidyo patent applications. Vidyo’s algorithms team has been working for a long time on H.265 technology and invented multiple breakthroughs in this space. 

Vidyo’s participation in this submission shows our continued leadership position to standardize scalable video coding for both existing H.264 and the emerging HEVC codecs. Vidyo was the first to use SVC as a basis for our VidyoRouter architecture which enabled us to transform the industry. Now, major players, including Microsoft and Polycom are following Vidyo’s lead and have announced that they too will add SVC to their systems, while Cisco has announced plans to move to H.265. We would like to share with you our view of what is happening in the market and clarify some of the confusion.

Polycom’s announcement today validates Vidyo’s approach regarding a scalable coding based software architecture that is extensible via API to go after the soft client market. Vidyo is the only company that has 3rd generation products in the market today which already incorporate years of field experience and customer feedback. Polycom’s announcement is an important first step in expanding the market around SVC based solutions, but the product portfolio announced today demonstrates that Polycom is a long way from supporting the full market’s needs.

The rest of the industry has now acknowledged that an SVC-based architecture is required to achieve scale and extend the reach of video conferencing deployments. As a result, any new codec design intended for real-time communication will need to support scalable video coding. Vidyo’s architecture goes beyond simple layer switching or migration of a transcoding MCU to software. We expect to continue to lead the market in price and performance given our business model, field experience with third generation products and of course our blocking intellectual property.

This is especially important in view of the several trends and announcements in the market place:

Polycom’s announcements of the RealPresence soft MCU with support for SVC and "free SVC technology"
  • What they are offering for free is a codec implementation, not a full endpoint, and certainly not a new architecture. Since it is the infrastructure that really counts, Polycom’s announcement serves for nothing but market expansion for Vidyo, as it endorses Vidyo’s SVC based approach and expands the market of SVC endpoints that will be able to connect to Vidyo infrastructure without transcoding.
  • Polycom’s claim that their new codec offering will benefit in interoperating with other companies (especially Microsoft) from licensing their codec is clearly not the case as “standard codec” is exactly what the name implies… a standard codec… a very small part of the architecture that can be implemented by anyone without gaining competitive advantage. Vidyo has already demonstrated signaling interoperability with Microsoft Lync. Once Microsoft’s SVC based Lync is deployed, Vidyo will be able to connect with those clients without the need for transcoding. Until then Vidyo has announced transcoding for MS Lync that is 7X less expensive than Polycom’s solution.
Vidyo Diagram

In fact, when you review the compliancy requirements of the ITU SVC standard, and associated intellectual property licensing, it is very clear that Vidyo’s coding is really the gold standard for SVC. When Polycom decodes the ITU-T compliancy bit streams they will be using profiles and compliancy tests defined by Vidyo’s algorithms team. They will even be using Vidyo’s intellectual property licensed through MPEG-LA. 

Table 1

Additionally, as the table above shows, Vidyo has a huge lead on Polycom with respect to transport interoperability (how scalable coding is transmitted over the internet) and, of course, the architecture and maturity of the VidyoRouter.

Polycom’s announcement contains a lot of late-to-the-game tactical moves such as a soft MCU with SVC support, which lags in performance compared to the VidyoRouter and is expected to be delivered over the next three quarters. In evaluating Polycom’s announcement, there is one innovative industry first with regard to room systems but no innovation in software or architecture – just catch up to capabilities Vidyo has been shipping for years. Vidyo is already working on the next generation of this technology per last week’s announcement.

Cisco’s claim that H.265 makes SVC "old technology"


Industry old-timers may remember the same team in Cisco (then Tandberg) claiming HD is not needed (responding to LifeSize’s entry to the market) until they had their HD product. In reality H.265 will not eliminate the need for a transcoding MCU just as the H.264 (also saving 2x on bandwidth vs. H.263) did not fix the flawed architecture. Nor does the codec eliminate the need for MPLS networks.

An H.265 codec without scalability has all of the inherent problems of H.264 without scalability, even though its bit rate is lower and it enables higher resolution endpoints. For example, some heterogeneous environments with higher resolution endpoints (enabled by H.265) would increase the need to transcode / trans-rate, ultimately making the problem worse. Vidyo’s architecture here is key – scalability with the right architecture will deliver rate matching without transcoding. Vidyo’s architecture will be software upgradeable to support H.265 -- this is not something Cisco or Polycom can deliver to their customer base for deployed room endpoints.

Table 2

It took some time, but most players have figured out that they need to play the scalability game.

The reason we see all these moves is because the big players recognize that there is a $22B market by 2015 for products like Vidyo’s and significantly larger market for services.

Scales Image

Vidyo views the introduction of relevant products by other industry players positively since competition is required to accelerate market growth. The key point is that the market has come to Vidyo and is now playing according to Vidyo’s rules, where Vidyo has the most mature products, and the best business model and structure to leverage it. Vidyo also has the intellectual property to protect the best quality scalable coding based (H.264 or H.265) solutions. All of this coupled with the coming VidyoWay offering will provide a no cost migration path from the old to the new world.

It is a once in a lifetime opportunity to be inside a market transition like this. It is even more rare to be the one driving it. As a Vidyo partner, that is exactly what you are doing.

Please don’t hesitate to reach out to your Vidyo contacts if you have any questions.

Best Regards,

Ofer Shapiro, CEO
Vidyo Inc.

1. Infonetics: http://www.infonetics.com/pr/2012/4Q11-Enterprise-Telepresence-and-Video-Conferencing-Market-Highlights.asp



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