IBM Computes a Stake in Digital Media

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Venerable computer giant IBM Corp. has set its sights set squarely on digital media, with a major new initiative aimed at giving Big Blue an early claim in the grab for market share.

The White Plains, N.Y.-based computer software and hardware provider has unveiled Digital Media Factory, a division that offers standards-based technology and services to help digital content owners manage, store, protect and distribute their new media assets.

It will pull together an assembly line of IBM workstations, storage, middleware, applications and professional services.

The Digital Media Factory will also tap technology from IBM's business partners. That initial lineup includes the video archiving specialist Virage Inc., media-asset management provider Ancept Inc. and Web publishing's Divine.

"I think what we've identified as the next big thing for us is digital media," said IBM Digital Media chief technology officer Jurij Paraszczak.

That's because digital media has become a big thing for plenty of enterprises, ranging from hospitals with computer health records to cable networks with reams of video files. IBM projects the market for digital content and management systems will reach $30 billion by 2004.

"What we are trying to say here is there is a convergence of many things," Paraszczak said. "There is the desire to get to customers, the desire to reduce the infrastructure cost, there is an increase in processing power, there is an increase in bandwidth. There are all these things coming together, and basically the only way you are going to get this interactivity around all of these factors is Information Technology."

The Digital Media Factory's aim is to market standards-based products and to help companies assess their specific digital management needs. That includes not only encoding and digital storage systems, but also the integration plugs needed for billing and back-office systems.

"One thing that is always missing, or usually in these kind of systems, is, 'How are the business systems connected to this?' " Paraszczak said. "If you can't bill for it, how can you make money off it?

"For us, we're trying to provide both infrastructure, provide partnerships, provide integration into the e-business processes of a company to help them generate revenue out of new media."

IBM is hardly alone in the hunt for digital media opportunity. But while other companies are fielding coordinated digital-media product lines — including Microsoft Corp. — IBM is setting itself apart by taking the standards-based approach, according to IBM Digital Media marketing director Scott Burnett.

"It really is looking at providing for this framework in this open architecture for which everybody is invited, from a partner perspective, as far as other third-party technologies that have best-of-class applications in their own right," he said.

Choosing a standards-based route also gives customers some assurance that they won't be stranded with proprietary technology.

"Customers look at your solutions from two perspectives: They say, 'What does it cost?' and they say, 'What happens if I have to take it over or you are not there any more?' " Paraszczak said. "And, 'What is the operating cost for this? What if I need to change something?' Those are the questions that they ask.

"And the use of standards makes them very comfortable that even if one particular supplier might not be there or they may want to change something, that they can do that."

For cable networks and other video providers, Digital Media Factory can put some order to digital chaos. That includes helping video content owners organize their filing system.

"Unless you know what your content is and where it is, it is of no value," Paraszczak said. "For many of our customers, what they find is it costs them 10 times as much to recreate the same content as it does to find it."

IBM can also help clients securely distribute that content and deliver it via streaming media for less expense, he added. But the digital-media market is not confined to video clips of Britney Spears concerts.

"A lot of people out there are missing what's going on with digital media," Paraszczak said. "They sort of still think it is in the entertainment space, and that it is proprietary. And true, right now, there is a lot of proprietary stuff out there.

"But at the same time, what is happening is, the business applications of media — ranging all the way from things like e-learning or just confidential content distribution or corporate education — all of these things are pushing the limits of Internet technology."

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