Archive for October, 1996

Streaming Data and Consciousness

Tuesday, October 29th, 1996

(This column first appeared in the October 29, 1996 issue of PC Graphics Report)

Over the last several weeks, I’ve been inundated with a variety of press releases dealing with YASDT – Yet Another Streaming Data Type. I’ll state right off the bat that new Internet data types don’t thrill me. In fact, I despise them. I believe that I already have to deal with more data types than I really need, and don’t like the idea of having to add more to that list. That said, some of the streaming data demonstrations I’ve seen have been impressive.

Streaming Primer

For those of you not familiar with what streaming data is all about, let me give you a small primer.

As you are probably aware, things like graphics, video, and sound take up a lot of data if you want them to convey a reasonable amount of information When the Web became a popular thing to support and use, people discovered rather quickly that it takes a while to download multi-hundred kilobyte media files, just to hear someone talk, or see a video clip. What made these download experiences extra painful was that they had to complete in order for the media to be accessible.

“Streaming” changed all this, by changing the way data was sent from a Web server, and interpreted on the client side of things. The server, with the aid of specialized handshaking, keeps a steady stream of media data streaming to the client, while a special “player” on the client side sucks up the data stream, and plays it back on the fly.

Progressive Networks, of Seattle, WA, with its RealAudio technology, was among the first to offer streaming media, initially for sound. Currently, on a 28.8 Kbps link, RealAudio can play full stereo, near-CD quality sound in real-time.

Streaming Business Model

The way Progressive makes money is by selling add-on server software to handle the streaming data. The average cost per RealAudio server stream is $85. The client-side player is free, although the company does have an upgraded client-side player that offers a few extra bells and whistles for sale. I should also mention that Progressive sells tools for encoding sound and multimedia into the necessary format for streaming.

The server stream pricing model works, but only for the time being. The disadvantage Progressive has (and already knows of) is that their revenue stream depends on an add-on to existing server software. Companies making server software have realized that in order to differentiate themselves from each other, they need to come to market with streaming server technology themselves. And once it’s in the server software, it’s basically free. No more add-ons required.

To Progressive’s credit, they have managed to sign up an impressive list of customers, including ABC, NPR, and dozens of other news and music sites. They also realize that their model, as it currently stands, cannot support them for long, so they have launched a number of initiatives to try to keep a step ahead of the pack.

Streaming Evolution

Apparently, Progressive realized early on that the same technology that allowed audio to be streamed would also allow other data types to be streamed. Thus was born the recently announced RealMedia Architecture (RMA). RMA builds on the streaming technology in RealAudio, but extends the server add-on so that multiple data tracks can be sent in parallel in a stream by the server, while an updated client can take the data tracks and pass them to the appropriate player on a users’ system. The players are part of a new client-side plug-in architecture which allows third parties to developed RMA-compatible players. So far, RMA sports support from companies offering video, MIDI, graphics, and more. According to Pat Boyle, Progressive’s product manager for RealMedia Tools, RMA will ship in December.

RTSP

On the other front, Progressive, with the help of 40 other companies, including Apple, Autodesk/Kinetix, HP, IBM SGI, Sun, Macromedia, and Netscape, has announced a standards initiative called the Real Time Streaming Protocol (RTSP) for delivery of real-time media over the Internet. The first draft of the protocol specification, RTSP 1.0, was submitted to the Internet Engineering Task Force (IETF) a few weeks ago. RTSP is basically the handshaking mechanism for streaming.

Progressive will provide a reference implementation of RTSP. Why would Progressive do something that might kill its business?

First, Progressive is attempting to ensure that when a standard is passed (which would ultimately happen with or without their involvement), Progressive’s technology is not outdated and does not have to be revised. In other words, if you propose the standard, you control it, to a certain point. This is part of the typical Microsoft standardization procedure, not surprising when you consider that Progressive’s founders came primarily from Microsoft. Where Progressive differs from Microsoft is that they aren’t dictating the standard to others – instead they are collaborating with others to bring it to fruition.

The second reason Progressive can afford to bring RTSP to completion is because it’s only part of the equation. Anyone wanting to implement RTSP still needs to develop or buy tools to encode data for streaming, and also would need to develop multi-stream players. With the RMA client plug-in player model, and the partnerships announced, Progressive has a serious head start there.

However, the aforementioned server software companies, most notably Microsoft and Netscape, are already on the move.

Microsoft’s NetShow

Microsoft has a new technology in development called NetShow, Beta 2 of which should be out by the time you read this. Microsoft, for the time being, is looking at RTSP, but not supporting it. According to Jim Durkin, Microsoft’s Manager of the Network Multimedia Product Unit, his company will support RTSP if it becomes widely used and adopted by the IETF, but until then is holding the specification under review and will continue working on its own technology, NetShow.

NetShow is a multiple data type streaming and CODEC mechanism, but it’s not being pushed as being as general purpose (in terms of breadth of data types) as RMA. NetShow’s focus is audio, video, URLs, GIFs, and JPEGs, and the server component of the software, once released, will become a standard item in Windows NT Server Edition (it won’t run on the Workstation version of NT) and Microsoft’s Internet Information Server (IIS). The NetShow client will be standard with Microsoft’s Internet Explorer 4.0. Jim Durkin also told me that in current tests, on a 200MHz Pentium Pro system, NetShow has been able to support 1,000 simultaneous 28.8 Kbps streams. Pretty impressive, especially if it’s basically free…

Netscape’s MediaServer

Netscape, a public supporter of RTSP, has announced Media Server 1.0, which is supposed to be part of the new version of the company’s SuiteSpot server software when it ships at the end of the year. Media Server, which is supposed to adhere to RTSP, will initially only deal with audio information, but that still provides something that’s almost as good as RealAudio for free (RealAudio offers better quality, based on Netscape’s specifications). Netscape’s big pitch is the cost (or the lack thereof) as well as the ability to add synchronized sound to Java and JavaScript applications resident on a Web site. I would bet that streaming video isn’t far behind, once the company is happy with the performance and stability of the initial release of Media Server.

Macromedia’s Shockwave and Audioactive

I would be remiss if I didn’t include Macromedia’s streaming technology in this overview. Macromedia’s Shockwave technology was perhaps the first major  multi-content streaming technology on the market, and with a price of zero for delivery, certainly attractive. Note that Shockwave doesn’t require special servers to stream data – the Shockwave player happens to be able to take data in small chunks and do something with it, which is in effect, similar to streaming, but without the handshaking and VCR like controls for server data that Progressive and NetShow offer. I should also point out that Macromedia is not doing Shockwave solely for altruistic motives – Macromedia makes its money from the tools it sells to create Shockwave content.

Now, in just the last week, while at the same time supporting RTSP, Macromedia has teamed up with Telos to produce Audioactive, a direct competitor to RealAudio. Macromedia officials claim that Audioactive is a better deal than RealAudio because Audioactive’s server pricing is per server and not per stream. Macromedia claims that its customers will only pay around $7,000 for between 100 and 200 simultaneous streams vs. $8,500 to $17,000 for a RealAudio server solution (using Pat Boyle’s $85/stream cost figure).

I personally think it’s a bit late for Macromedia to be getting into the audio stream server market at a time when Progressive is moving past that type of technology, and Netscape and Microsoft are offering the same technology pretty much for free.

Down Stream

I think decent, wide-spread, and affordable streaming technology and tools are second in importance only to micro-payments on the Internet. Without good streaming technology, the Internet can’t be used as the multimedia backbone it is destined to become.

While it may not be obvious, the success of the Internet (and therefore streaming technology) is important to those of us in the PC graphics industry – just think of all the bundling, support, and acceleration opportunities available for various streaming data types like audio, video, MIDI, and 3D.

ISDN’s Hidden Costs

Saturday, October 19th, 1996

(This column originated as a Letter to the Editor of the Derry News in Derry, NH circa October, 1996)

Note: This topic in this letter to the editor is somewhat regional, and may not apply if you happen to be fortunate enough to live in an area where your local phone company charges you a flat rate for local ISDN service. Here in New Hampshire, things are a little backward when it comes to our phone company…

In reading the October 18th issue of the Derry News, I was bemused by how positive a spin you put on Nynex’s $6 million dollar renovation. Nynex has certainly done a good job with their public relations.

While there’s no question that the new phone switch Nynex is installing will provide new benefits, such as caller ID and better quality, there is a question as to how useful the digital communcations features of the new system will be.

What I’m referring here to is ISDN (Integrated Service Digital Network) – a new service to significantly improve data communications. In the article, our own Earl Rinker touted ISDN as a key benefit of the new system. What Nynex has neglected to tell the people tooting Nynex’s horn for them (including, apparently, the Derry News) is how expensive and limited ISDN service really is.

For example, let’s say I went through the initial start-up expense of getting ISDN installed, which can be, on the low end, between $300-500 including the necessary ISDN hardware, or over a $1000 if certain conditions aren’t met. Once installed, the monthly fee for residential ISDN access ranges from $28 to $57. That’s not too bad if you need faster data access to another computer system.

Where the hidden costs lie are in the metering that Nynex performs. Every ISDN call costs extra money, above and beyond the monthly base fee! In addition to the 2 to 5 cents you pay every time you make a call on an ISDN line, you’ll also pay a per minute surcharge of anywhere from 3 to 24 cents a minute! Double that if you want to operate in high-speed data mode.

If you are like most families that spend an hour or two on the Internet every night, your ISDN surcharges will add up quickly – probably an additional $80 or so per month, on top of the monthly access fee! And businesses pay even more. Of course, compounding the whole situation is the fact that in order to make an ISDN data call, the number you’re calling also has to have ISDN, and currently no Internet Service Provider or on-line service offers ISDN in New Hampshire.

Nynex’s new phone system, arriving November 9th, may provide a number of benefits, but don’t count ISDN as one of them. If you still want fast data rates for your on-line use, wait until early next year when the new $200 56K bit modems hit the streets – pretty much the same throughput as regular ISDN, but without the steep price and limited access.

A Footnote

There are actually a couple of ways to sneak around the whole metered cost of ISDN, but these don’t tend to be readily available to consumers (the root of my gripe above). The first way, which requires effort primarily on the part of your data partner, involves making a data call via the voice side of ISDN, and once the connection is made, switching the call into data mode. This limits you to only a 56Kbps-64Kbps connection, and not the full 128Kbps that ISDN is capable of, but at least it doesn’t get metered like a pure data call would.

The other method requires more upfront money, and is only useful if your ISDN communcations are primarily with one other site. This involves having your ISDN number and the ISDN number of your ISP (assuming that’s your main use of ISDN) connected via a Centrex system (ask your phone company for details), which allows you to make full 128Kbps calls at no extra charge.

CompuServe Owns Your Thoughts

Tuesday, October 15th, 1996

(This column first appeared in the October 15, 1996 issue of PC Graphics Report)

Are you a CompuServe subscriber?

Does your company operate a CompuServe Forum?

Do you or your company post messages and files in public areas on CompuServe?

If you answered “yes” to any of the above questions, in particular the last one, then you should be aware that CompuServe now has complete rights to redistribute and modify any software, text, or graphics content in CompuServe’s public areas, whether placed there years ago or today. And, there’s nothing you can do about.

If this isn’t causing warning bells to ring in your head, imagine that you’ve licensed a time-limited utility or program to ship with your product and posted up in your company’s support forum on CompuServe. If it so chooses, CompuServe now has the legal right to modify the time-limited software and remove the time-lock so that it’s an unrestricted release of the same software. In the same vein, CompuServe, or its designated agents, could also legally reverse engineer driver code, screen utilities, and whatever else you put in their public fora.

Similarly, you post some licensed copyrighted photography on CompuServe with specific restrictions that the image only be downloaded and viewed as a whole image, those restrictions wouldn’t apply to CompuServe – they could sell t-shirts with the image and not owe you a cent. They could also use the image as part of a collage, in print advertising, and in any way they choose. For that matter, it could be altered in any way CompuServe chooses and redistributed.

How did this all come about?

A few weeks ago, CompuServe posted a news item in their “What’s New” list, entitled “Notice of Online Change Agreement”. According to the executive summary for this news item:

CompuServe has reorganized the agreement terms and operating rules for the CompuServe Information Service to make them easier for customers to read and use. At the same time CompuServe has also modified and updated those rules with a number of important changes aimed at keeping the rules up-to- date with the industry.

The summary goes on to suggest that people read the new agreement carefully (GO RULES on CompuServe), but how many users normally bother with a whole bunch of legalese they probably won’t understand? Apparently some CompuServe SysOps are asking the same question in the SysOp-only Forum on CompuServe, and are wondering when the proverbial crap will hit the fan, once the word gets out that CompuServe has usurped the rights to all their thoughts, works, and everything else they post on the service. Some of the SysOps have already removed everything they have ever uploaded to the service to make sure that CompuServe doesn’t trample on their rights.

The offending language in the new customer agreement is below, with key parts highlighted:

8.2 GRANT OF LICENSE TO COMPUSERVE.

Each Member, and any user of a Members account, who places or has placed software, a file, information, communication or other content on, in, over or through the accessible areas of the Service grants to CompuServe (and to CompuServe’s designated licensees, transferees, designees and contractors) a non-exclusive, paid-up, perpetual and worldwide right to copy, distribute, display, perform, publish, translate, adapt, modify and otherwise use in connection with CompuServe’s business (and that of CompuServe’s designated licensees, transferees, designees and contractors), such software, files, information, communications and other content, regardless of the medium, technology or form utilized by CompuServe in exercise of  this grant. Subject to this grant, each Member who places software, files, information, communications or other content on the Service retains any rights Member may have in such content.

They were nice enough to let people who post anything on CompuServe retain the rights they had before, except for the license granted CompuServe.

The implication of the above paragraph is that this all applies to only the public areas of CompuServe, but the phrase “accessible areas” could be construed to include all private parts of CompuServe, including e-mail, since even private areas are accessible, albeit it to a privileged few.

If you use CompuServe regularly, you may want to switch to some other service that’s not as predatory. This all sounds like something that Microsoft might do if they had a commercial on-line service. Wait! They’ve got MSN. I wonder how their customer agreement reads…

Planning for COMDEX

On a happier (or perhaps sadder) note, it’s almost time for our industry’s annual schmooze-fest, COMDEX/Fall, in Las Vegas, NV, the week of November 18-22. If you happen to be going, I’ve got a few tips for those looking for diversions above and beyond the show floor.

If gambling is your thing, and are as good at it as I am (the casinos love me and my perpetual contribution to their coffers), I’d like to recommend that you pick up a copy of Masque Publishing’s Deluxe Casino Pak (DCP). DCP has two parts to it: a lame superficial story line about an “adventure” to win a million dollar poker jackpot, and a much more worthwhile complete set of gaming simulations. The latter are well worth the $39.95 price of the software. Gambling game simulations include several poker variants (Texas Hold ‘Em, Omaha Hold ‘Em, Let It Ride, 7 Card Stud, Caribbean Stud, Pai Gow, several versions of computer poker etc.), Black Jack, Roulette, Big 6 Wheel, Craps, a variety of slot machines, and more. (303.290.9853)

If you’re into the more prurient side of Las Vegas, I’ll let you find your own cab driver to recommend sleazy joints. However, if you are into high-tech smut, AdultDex ’96 (the Adult entertainment version of COMDEX) will be held for the second year at the Sahara Hotel, coinciding with COMDEX’s schedule. Keeping in line with the latest PC trends, the AdultDex flyer intimates that we’ll see the latest in multimedia, 3D virtual reality, video, and the Internet if we stop by. Dates are set for November 19-22, and a $5 admission fee is all that it takes to get in. They also claim to have hotel rooms available, a scarce commodity in Las Vegas during COMDEX. I don’t want to know what amenities come with the rooms, though. (317.651.9872)

If you’re an exhibitor at COMDEX, or just someone who wants good publicity for your products, I can highly recommend getting a table at the annual Silicon Northwest event, always held on Tuesday nights. Original started by Ginger Brewer, a public relations expert, Silicon Northwest was the first post-show hospitality event exclusively for the press sponsored by a collaborative group of Ginger’s clients, and has since been duplicated by many others. Silicon Northwest’s hallmark is seafood from the Pacific Northwest, flown in fresh for the event. Silicon Northwest is now operated by InSync PR, and based on personal observation, last year’s event attracted several hundred known members of the press.  Exhibitor tables cost $3,500, if they have any left. Oh, and it’s going to be at the Alexis Park this year.

Finally, you’re only a shaker and mover in the PC graphics industry if you know about the invite-only Graphics Bowling Night at COMDEX/Fall, held the Sunday night before the show opens, and after the VESA and Ziff-Davis benchmark presentations. If you know what this event is, please note that it’s on again. If you don’t know, but still consider yourself a shaker and mover, drop me a note, and I might tell you about this exclusive soiree, offering perhaps the best food and entertainment you’ll have all week.

By the way, if you don’t already have a hotel room for COMDEX, good luck!

Letter from STB

Sunday, October 13th, 1996

(This is a letter from STB Systems in reference to The Richter Scale column on the death of the graphics board industry, published on 9/17/96).

To the Editor:

Reading the Richter Scale in the September 17th issue of the PCGR brought to mind a cable that Mark Twain once sent to the Associate Press. It read; “The reports of my death have been greatly exaggerated.”

Under the banner of “PC Graphics Board Trauma,” Jake delivers a spirited indictment of the PC graphics board business. With this rebuttal, I will attempt to refute the “death spiral” theory he advances and shed some additional light on this topic.

The column details the events that have conspired to rob Jake of his faith in our business. All of which, at first glance, could seem quite menacing. The first of these is the presence of more large stable chip companies in business today. Although the column provides sound business advice to these companies about being trusted and developing “sexy” products, it never really explains how the successes of S3, Cirrus Logic, and Tseng should be adversely effecting the add-in board industry. Intuitively, one would expect larger silicon developers to deliver superior products resulting in stronger board companies.

The second proposition, cat-like in its ability to survive, is that all of the system vendors will opt to put graphics on the motherboard. We actually see more evidence against this than ever before as the incremental cost of using add-in cards continues to decline and OEMs place additional importance on maintaining flexibility in a market with ever shortening product life-cycles.

Another of the column’s observations is that consolidation among PC manufacturers is continuing in a growth market. Short of these companies gaining monopolistic power, this may actually be viewed as a benefit to add-in board manufacturers. It allows us to provide greater support resources to a smaller number of larger customers. It also allows us to be more efficient logistically and assume less credit risk.

All of which have the potential to contribute to profitability. The Network Computer may or may not be the next great wave. There are many sound arguments on both sides (and some not so sound). Regardless of the success of the NC, growth in the mainstream personal computer business is healthy and the majority of forecasts available predict it will stay that way. Witness the current share prices of companies such as Compaq Computer, Gateway 2000, and Dell Computer, all of which are within percentage points of their 52 week highs.

Ironically, the column offers as its only real evidence, “…the recent declines in the stock prices of some of the leading graphics board vendors.” It is true that a couple of high profile companies have taken a beating lately. However, Wall Street’s disappointments with these companies came primarily as the result of flawed inventory management systems, failed product strategies, and/or weak operational controls. On the other side of the coin, the share price of the world’s second largest graphics board company (NASD: STBI) has more than doubled this year. We suspect that Matrox (privately held) is also enjoying a profitable year.

As a computer industry marketer (read this cynical and paranoid), I always prefer to seek out and review empirical evidence from trusted sources before reaching a conclusion. With the foregoing in mind, let’s take a look at some additional market data.

First, International Data Corporation provides us with a well researched and comprehensive examination of the add-in board market in its, “Desktop and Graphics Multimedia, Intel VGA Add-In Board Market Review” for 1996. In this report, IDC forecasts a robust 13% compounded annual growth rate through the year 2,000 for the add-in board business.

Next, we head out to the street where we find one of the nation’s largest computer superstore chains recording a nearly 300% growth in sales from the previous year in the add-in video card category.

Finally, our most beloved and trusted source for industry information, “PC Graphics Hardware Market Report” recently reported an almost inexplicable 34% quarterly growth in the add-in board business.

So, don’t send for Dr. Kevorkian just yet. We, along with leading analysts and researchers, see an add-in board industry that is alive and flourishing. I hope I have helped Jake find some of his lost faith and provided additional insight on this subject.

Very truly yours,

John Gunn
Director of Marketing
STB Systems