The report states that in an age where OTT service providers and system integrators are making inroads, CSPs and MSOs risk becoming bitpipe providers only unless they are quick to innovate. Virtualization based on NFV and SDN capabilities are expected to provide agility for new services, higher performance, flexibility across networks and platforms, and lower cost of ownership.
Elemental Technologies, called out by Gartner as being a disruptive technology provider in this field, is calling the report a confirmation that the so-called traditional hardware-based video processing era is coming to an end.
"Gartner is known to identify disruptive technologies that media enterprises need to confidently launch new services and successfully engage with the consumer viewing trends that are transforming the video industry as we've known it," said Sam Blackman, CEO and co-founder of Elemental.
SDV has been validated in a way by the success of some of the new entrants like Netflix (NASDAQ:NFLX) or Hulu, said Keith Wymbs, chief marketing officer at Elemental. "All new entrants have made a strategic decision to do almost all of their infrastructure in software. What we have seen over the last five years is a need for an operator like a cable company ... in order to create a compelling offering on par with the experience (given by) Netflix, they need a software package."
One example is a TV Everywhere app provided for CNN where the user experience is similar to the live broadcast channel, but there is additional relevant content offered for viewing on demand, Wymbs said. He also pointed to Comcast's (NASDAQ:CMCSA) X1, which allows a viewer to stop content and pick up where he left off on a different device. "This is hard to do with hardware because it (involves) essentially retagging video streams and making adjustments (based) on requests coming from users."
While Gartner did express a need for more standardization in the virtual realm, Wymbs said it is becoming evident that in certain areas, proprietary or de facto standards are acceptable and pointed to Apple HLS as an example. The company publishes its spec once or twice a year, and the market is expected to evolve with any alterations. It utilizes the H.264 video compression codec, which Wymbs says makes it a hybrid.
"I don't sense a lot of people have been hurt ... (Apple) doesn't restrict who can use it," Wymbs said. "Going forward we see (SDV also) as a hybrid, and that is OK. Some elements need to remain standardized to achieve scale and to reduce cost for the consumer device. I think it is happening naturally based on what the consumer wants - content anywhere."