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Tracker

Microservice architecture in video middleware promises agility but risks stability in shrinking market

Via ABI Research Media Releases

Aug 12, 2016

Scottsdale, Arizona - 11 Aug 2016

Though ABI Research forecasts a flat video software market through 2021, with revenues remaining close to $4 billion through 2021, the video software market is at a significant inflection point. Many middleware providers—those offering software enabling delivery of video services to operators, often adding value to base video offerings—are evaluating the efficacy of microservice-based architecture for their solutions, meaning that they are focusing on a larger number of more concentrated services to promote flexibility. But the greater number of interoperability points across the platform risks stability.

“The video software market, including middleware, conditional access, DRM, and guide software, is feeling pressure as the industry migrates away from up-front sales toward Software as a Service, or SaaS, business models,” says Eric Abbruzzese, Senior Analyst at ABI Research. “Microservices can enable operators to deploy best-in-class services and stay competitive, at the risk of increased service complexity, dependence on more suppliers, and possible IT incompatibilities.”

Managed video service businesses including content delivery networks (CDNs) like Akamai, Level 3, and Limelight and managed video platforms (MVPs) that focus on turnkey service offerings, or end-to-end operations of video services, like Quickplay (recently acquired by AT&T), are draining video distribution revenues. Meanwhile, an increase in quality and availability of public cloud offerings expounds this trend. Mature market saturation, cost and consolidation pressure from open source software, and trends toward in-house development from some of the largest operators, drive the flat video software market forecast.

“Multiscreen services have largely migrated to SaaS business models, while operators still have some resistance to migrating traditional set-top box middleware software licenses to SaaS,” says Sam Rosen, Managing Director and Vice President at ABI Research. “We expect middleware vendors to describe the benefits of SaaS models to the operator community at the upcoming IBC 2016 conference, in addition to continued discussion around 4K services and content protection.”

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