While Arris and Charter Communications are putting up $135 million to acquire ActiveVideo through a new joint venture, they intend to keep it on a relatively long leash and let the cloud video tech specialist operate relatively independently.
“It will run as a separate company with the two partners…and the idea is to keep the [ActiveVideo] team nimble and able to innovate,” Bruce McClelland (pictured), president of Arris’s network and cloud and global services division, said in an interview.
San Jose, Calif.-based ActiveVideo has about 100 employees. “For the most part, the team will stay intact; at least that’s our hope, anyway,” McClelland said. Arris and Charter have already said that Jeff Miller, ActiveVideo’s current CEO, will continue to lead the company.
McClelland said the acquisition is “pretty strategic for us,” noting that it will give Arris the opportunity to work more closely with what will be the second-largest North American cable operator in the wake of several pending transactions, including the Comcast-Time Warner Cable merger and Charter’s planned $10.4 billion acquisition of Bright House Networks.
But beyond that, McClelland said interest in acquiring ActiveVideo has increase as the company proved in recent years that its technology has matured and proved to be scalable at an enterprise level following deployments with MSOs such as Cablevision Systems, Liberty Global and, most recently, with Charter.
“They’ve kind of turned the corner,” McClellan said of ActiveVideo. “We expect to be able to scale that business and take the technology and deploy it more ubiquitously around the world.”
While ActiveVideo’s original claim to fame was the ability to refresh the experience on legacy, lower-end boxes by stitching the interface to the video and delivering it to QAM-based boxes in a single MPEG-based transport stream, their technology also plays well on newer IP-capable devices, such as Charter’s new Worldbox, McClelland said.
He said Arris is also eager to help MVPDs integrate OTT apps such as YouTube and Netflix to set-top boxes at a higher rate of speed using StreamCast, a new component for ActiveVideo’s flagship CloudTV platform.
Integrating those native clients, even on next-gen IP devices, is still not an easy task. “Using HTML browsers as a unifying technology is nice on paper, but it still presents a challenging implementation,” McClelland said. He knows that from experience, as Arris has successfully been able to weave Netflix and other OTT apps into its own set-top platform for operators such WideOpenWest.
ActiveVideo’s virtualization engine to run OTT services and other apps in the cloud in tandem with a small software client app running on a set-top, Roku box, or even a smart TV “makes that integration effort much simpler,” he said.
Although ActiveVideo’s technology can help virtualize the functions of a set-top, Arris views it as “very complementary” to the company’s traditional set-top/CPE business. “They are not mutually exclusive,” McClelland said.