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Continuing broadband boom heralds arrival of the home gateway at last

The home gateway has been talked about for long enough, but how many have actually been installed so far? Not a lot, and meanwhile its future appears to have been imperilled by the spectre of cloud services offering a safe and cheap place of unlimited capacity to store all that music and all those home videos, as well as providing the source of on demand pay TV content. But this negative equation between the gateway and the cloud is a false one, for actually the two are going to march forward together. The cloud may well be the place where personal and recorded content is stored, but the gateway will be the point of control, mediating between the external network based services and the increasingly diverse functions executed within the digital home.

This point has not been lost on the more astute vendors of both hardware and software for home gateways, as can be seen from a clutch of recent product announcements. One that stands out for me came from Arris with the introduction of its Touchstone family of wireless voice and data gateways. Arris deals in CPE and infrastructure for the cable TV industry, although now prefers to set out its stall as a broadband services company. Touchstone therefore is for cable operators only, but for the first time Arris is making as much play about the features on the home network side as on the HFC (Hybrid Fibre Coax) front. Arris describes it as a game changer, presumably both for itself and its cable TV customers. Such rhetoric can often be dismissed as marketing puff, but on this occasion it is about right. Whether the Touchstone family itself proves to be the game changer remains to be seen, but the shift in emphasis that it represents on the CPE front most certainly is. It is no coincidence that some of Arris’ largest customers such as Comcast of the US, the world’s number one cable TV operator with over 20 million subscribers, have been clamouring for this product and plan to start deploying it before the year is out.

 

On the HFC side, Arris is touting its channel bonding, which increases available bandwidth by aggregating up to 24 channels together. It was notable the strong emphasis Arris is placing on upstream bandwidth to meet increasing demand, generated partly by cloud services, for uploading content rather than just consuming it within the home. On the home networking side, Arris was trumpeting its inclusion of Celeno’s CLR260 3x3:3 chipset, which is pretty much state of the science for home Wi-Fi technology with various enhancements to the standard MIMO technology, including transmit beam forming, which involves coordination of multiple transmission antennae such that radio waves from each interfere constructively at the receiving end to boost the overall signal and hence increase both range and bit rate. Other important add ons aimed more at dealing with interference both from physical objects and radio signals are Tunneled Direct Link Setup, designed to focus available bandwidth on the actual point to point links in operation at the time, and real time channel hopping, aiming to find the best part of the spectrum at a given moment for transmission.

 

The underlying message behind developments such as the Arris gateway is the continuing proliferation of broadband services, as confirmed by the latest data from the Broadband Forum indicating that global broadband subscriptions have soared to over 624 million by the end of Q2 2012 compare with about 565 million a year earlier. The Forum itself argues that this presents a huge opportunity for broadband operators to exploit the connected home, as they control the means of service delivery. This must all be music to the ears of the few software companies that have specialized in the home gateway, notably French based SoftAtHome, which was ahead of its time with its SOP (Software Operating Platform), but it now looks as if the rest of the industry is catching up. SoftAtHome has a modular platform that is hardware independent, and supports not just existing broadband delivered services such as TV, but also what the company believes will be big emerging applications in the digital home, such as home security, environmental control, and eventually remote healthcare. This is a good place to be if, as Arris claims, the game has indeed changed to one favoring the fat home gateway as an equal partner with the cloud.

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The importance of the home gateway in the age of OTT, it will be a key enabler of Big Data.

I wrote this blog entry in planning my visit of the BBWF 2012 show floor.

OTT is creating a deep shift in the TV value chain. Most cord cutters or thinners actually leave their traditional pay TV service to go somewhere else, or trade down to a cheaper subscription. Someone out there is profiting. Even if a 100$ monthly spend becomes 10$, that’s still 10$ of fresh ARPU for the new guy.

But Hulu, Netflix, Roku, Amazon, Google, Apple, Microsoft beware: pay TV operators and even dusty old Telcos have realized that they too can be the new kid on the block when it comes to OTT TV.

But why would I be interested in an old pay TV operator, let alone a Telco, when all the sexy OTT upstarts are vying for my business?

One answer is data, or rather what has recently become known as Big Data. It’s adding fuel to traditional CRM and data mining, but also brings radically new service possibilities.

Like data mining Big Data is basically about aggregating data from user’s interactions with a given service and then number-crunching it in huge data centres to provide marketing teams with customer intelligence. One main goal has always been to improve and better target products to different markets and customer segments.

 

Data mining started as far back as the 1970s and by the 1990s it was an industry in its own right. But it has mainly been one dimensional, querying against a single relational database, or just maybe two or three interlocking databases. The most typical example is of a Supermarket chain analyzing data on the contents of shopping baskets to "mine" combinations of products that are purchased together (there's been a lot of mileage out of the good old beer and diapers case from the 1970s, where a marketeer - who wasn't yet called that - after analyzing shopping basket contents, realized that more beer could be sold if it was positioned in an aisle "on the way" to the diapers at least during weekends).

What’s new though is the explosion in different types of data, i.e. from all the screens in the house, and there’s also a huge increase in the amount of external data that can be collected from a range of sources including social media and messages. At the same time scalable cloud-computing architectures have come along to enable the data crunching to be powerful enough to get closer to real time answers, even when petabytes of data are involved.

So now instead of just realizing why subscribers behaved in a specific way in the past, Big Data will enable operators to optimize a service so it best suits what they will do in the future. For example providing near real-time content or service recommendations based on what the family is doing at the moment …

This is where Big Data will not only serve the interest of incumbent operators by giving them ammunition to fight off some of the OTT upstarts, but also bring new services to the end user. A few decades ago advertising was fun. But today TV advertising has become that period of time you either use technology to make disappear (i.e. with a PVR) or disappear yourself during the break. The truly personalized advertising that Big Data can enable could make it relevant and therefore interesting and oh so much more valuable.

 

You may be wondering what has this got to do with BBWF. Big Data has voracious appetite. This is where a broadband service provider can come in. 3G is often too slow, and is still capped in most markets, while 4G is still only in its infancy, so most content consumed in the home over IP will come through a broadband provider.

This means that a Home gateway is about the only place almost all user interactions go through. The gateway is also the hub of the home network where in-home usages like a child streaming a film dozens upon dozens of times can be captured to help personalize a service (who doesn’t have a few worn out Pixar DVDs that always amaze by still being playable despite all the scratches).

Where almost all operators have fared badly with their ambitious content plans, often closing down channels they created, OTT is giving them a second chance, thanks to the central role of the home gateway. Companies that are exclusively in the Cloud will never get such a complete picture of home usage.  Operators with coherent gateway strategies on the other hand will be best placed to harness Big Data by combining the cloud and the home network most effectively.

 

So at this year’s BBWF I’ll be looking out for companies that will enable my vision of the future. I’ll post something after the event, but I know I’ll look out at least for:

  • ADB that has extensive tools for monitoring home network usage,
  • Axiros that have championed and extend TR-069 to get it to carry more information than in the original spec,
  • Broadpeak who has made me curious with their new nano-CDN technology,
  • Cisco who’s new acquisition NDS have been championing Big Data for a while,
  • SoftAtHome with a compelling hybrid CloudAtHome approach,
  • Witbe and any other QoE companies that are monitoring retail devices.

See you there?