Calix Makes Deal with Microsoft

By STEVE HART

Petaluma telecom equipment maker Calix Networks has scored a deal with Microsoft Corp. to offer Microsoft's Internet TV platform on its access system, Calix said Wednesday.

The deal promises to boost Calix's presence in the market for Internet Protocol television -- also known as IPTV.
"It opens up a significant opportunity for Calix," said Teresa Mastrangelo, an analyst with Broadbandtrends.com in Roanoke, Va. "A lot of network operators are interested in what Microsoft is doing."

Under the deal, Calix will license Microsoft's Mediaroom IPTV and multimedia software to operate on Calix's network equipment.

The arrangement lets telephone companies quickly deploy IPTV, an advanced video platform that offers high-definition images and interactive features, said Geoff Burke, Calix's director of field marketing. "The Mediaroom applications are extraordinarily rich," he said.

Calix is a fast-growing vendor to small and mid-sized telephone companies in the United States and Canada. Its components let carriers deliver voice, video and high-speed Internet service over copper and fiber networks to homes and offices.

Founded in 1999 by former executives of Cisco Systems and Cerent Corp., Calix has raised about $300 million in venture funding. It has about 400 employees, including 250 at its Petaluma headquarters. Calix is a leader in technology that supports bandwidth-hungry applications such as IPTV, Burke said.

Microsoft's IPTV platform is currently being deployed by AT&T and a dozen other large carriers over equipment made by giant vendor Alcatel-Lucent. The deal with Calix lets Microsoft reach smaller carriers, Mastrangelo said. "For those interested in Microsoft's solution, it's another option," she said.

Calix provides access technology to 450 carriers -- one of every three North American broadband networks. About 175 of Calix's customers are rolling out IPTV service, Burke said. The deal with Microsoft will help Calix grow, though it's too soon to say how much, he said. "This is a big step for us," Burke said.

Calix is "a strong player in the video market," Mastrangelo said. "The fact that Microsoft sought to partner with them speaks very well of their capabilities."
 

While the Calix deal is non-exclusive, it gives Microsoft TV carriers a broader selection of equipment vendors, said Microsoft spokesman Jim Brady. Calix will become part of an "ecosystem" of Microsoft suppliers, he said. "Our goal is to give all our customers greater choice," Brady said. "We believe IPTV is the future of television," he said. Its interactive applications will let subscribers customize their viewing and even program their own content, he said.

Redmond, Wash.-based Microsoft, the world's largest software maker, launched its IPTV platform to tap into the booming market for broadband service, a company official said in August.

So far, AT&T is its largest customer, although Mediaroom also is being deployed in the United Kingdom, Germany and India.

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