Bob Wallace
July 1, 2008

Software vendor Espial Group Inc. plans to acquire IPTV middleware and applications vendor Kasenna Inc. to better address operators' set-top box, VOD and interactive TV software needs.

The specific value of the deal was not disclosed. Espial and Kasenna are both best known for their video efforts internationally. Kasenna has cut deals with telcos in Russia and China in recent months. The deal focuses the spotlight on the ever-growing importance of software in the advancement of IPTV deployments and TV service evolution.

"Acquiring Kasenna provides us with increased scale, expertise, product breadth and channel access to position ourselves as the leading choice for service providers worldwide," noted Jaison Dolvane, CEO of Espial. The combination of Espial and Kasenna strengthens his firm's position in the IPTV, hybrid IP-DVB and hospitality segments, he added.

Espial fights an uphill battle on the middleware and related software front from Microsoft TV's MediaRoom, which has been largely targeted at tier 1 operators worldwide.

Kasenna's describes its core offering, PortalTV, as both an application and content delivery platform. Most recently, it has worked with HP and Intel, which were initially designed to demonstrate the scalability of IPTV services. Scalability has become a concern of operators in middleware packages.

Kasenna's middleware supports MPEG-4 video compression, which is designed to provide higher performance without the bandwidth demands over the older MPEG-2. Many operators are in transition; they have begun implementing the former, but have not yet decommissioned the later.

As to Espial's plans for Kasenna: "Espial will work to support and enhance its relationships with all Kasenna and Espial customers, partners and channels." Dolvane said. "We will deliver integrated solutions with a predictable roadmap, along with continuing to sell component products for open and homegrown IPTV and hybrid IP-DVB video systems. Partnering with ecosystem partners, including third- party middleware and VOD companies will continue to be an important part of our strategy".

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