Microsoft Sells Mediaroom To Ericsson To Focus On Xbox
Telecom equipment maker Ericsson has agreed to acquire Microsoft's Mediaroom IPTV business, which makes software that allows operators to deliver television over the Internet, the company announced this morning (via Reuters).
Context & Ripple Effects
Mediaroom began as Microsoft's IPTV and multimedia platform launch in 2007, aimed at helping television operators deliver video over internet networks. A 2010 reorganization of the Entertainment and Devices unit provides the immediate corporate backdrop for Microsoft narrowing the scope of that broader portfolio.
The transaction places an operator-facing video software business with Ericsson, a telecom equipment maker, while Microsoft directs its entertainment emphasis toward Xbox. The story's wide pickup across major technology outlets underscores that the handoff matters to both telecom and consumer-entertainment audiences.
First-order effects
- Ericsson gains Mediaroom's IPTV software business, giving it a direct software offering for operators delivering television over internet networks.
- Microsoft exits the Mediaroom business and concentrates its entertainment-device attention on Xbox.
Second-order effects
- Telecom operators using or considering Mediaroom will engage with a supplier whose primary business is telecom equipment, making Ericsson's operator channel more central to the platform's distribution and support.
Third-order effects
- The deal points toward a division of labor in which general-purpose technology companies shed specialized operator software while telecom-focused vendors assemble more of the infrastructure and service stack.
The trend: Telecom software is becoming more tightly aligned with the network-equipment vendors that already sell into operator customers.