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The September 30, 2008 Issue Provided by System Dynamics Inc.
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Updates from the Valley

In our very first newsletter (April 2000!) we shared some perceptions about a few of the interesting companies in Silicon Valley. We've done periodic updates and thought it was time for another.

We visited the Valley again in July, and report on our visits with Ozmo Devices, 4Home, Actiontec and TiVo.

Ozmo Devices -- Wi-Fi PANs

In the beginning, Wi-Fi was about LANs--and of course that's still true. But an interesting thing happened as Wi-Fi matured. As the chips got cheaper, people started exploring how to expand the boundaries of Wi-Fi. Metro Wi-Fi was born, and services like FON leveraged Wi-Fi's capabilities and pervasiveness beyond its original target.

Ozmo Devices is taking Wi-Fi in a different direction, extending it into the PAN domain. They are doing this via a 2-part solution: a driver that coexists with the host platformís (e.g., a notebook computer's) Wi-Fi device; and an ultra-low-power component embedded in the wireless peripheral.

Ozmo mouse and sound dock --> Click for larger pictureWe had interviewed Ozmo by phone, and enjoyed the opportunity to see their technology in action when we visited with Roel Peeters, Ozmo's VP of Marketing/Business Development. Roel told us that the concept was developed by Ozmo's Chief Technical Officer Katelijn Vleugels, previously an RF designer at Atheros. The key concept was to leverage the existing Wi-Fi capability already present in many platforms. Special software in the host device "virtualizes" the Wi-Fi radio, sharing it between standard Wi-Fi WLAN devices and new WPAN devices equipped with Ozmo's single chip IC. The existing host Wi-Fi radio plays both roles simultaneously, eliminating the need for an additional radio or a dongle.

Ozmo's target market includes the huge number of mice and keyboards which currently use proprietary protocols (about 90% of the market, according to Roel). Other targets are wireless headsets and the rapidly expanding world of personal media players (PMPs) which require quality not provided by Bluetooth.

Ozmo started in December 2004 with angel investing, and has subsequently garnered significant support from Intel, both financial and in coordinated development. Ozmo has been working with Intel on their "Cliffside" program which was first described at the Intel Developer's Conference (IDF) in April. Cliffside allows a single Wi-Fi adapter to maintain two separate connections (one in LAN mode and one in PAN mode).

At IDF in August, Ozmo announced a Wi-Fi optical mouse reference design with Avago Technologies and a wireless audio reference design with Wolfson Microelectronics. It will be interesting to see whether Ozmo gains traction, since the market for PANs also has Bluetooth at the slow end and wireless USB for high speed connections.

Home Monitoring and Control -- 4Home and Actiontec

In our report on CES 2008, we wrote about several vendors using Z-Wave for wireless home control. During our California visit we followed up with 4Home and Actiontec.

4Home -- Software Platform for Home Monitoring and Control

We visited 4Home (previously 4HomeMedia) to catch up with what their primary focus is these days. The company has developed an advanced XML-based software and services platform that OEM hardware vendors and service providers can use to deliver applications and services including residential energy, media, monitoring and health. In our visit, it appeared that their key focus in on home monitoring, including control of lights and alarms.

4Home remote video monitoring kit --> Click for larger picture4Home thinks service providers should offer remote video monitoring as a value-added service, and have developed a remote monitoring platform designed for this application. They showed us a customer-installed kit for video monitoring being developed with a major Asian supplier, and said they are embarking on a field trial to show how service providers can make money providing these service.

Since home control requiring supporting lots of different equipment, 4Home created and constantly updates their Home Ecosystem Management database of drivers and profiles of home control products, media and entertainment devices, and mobile phones. This enables service providers to roll out a variety of device bundles with their control services. 4Home has worked with Actiontec, and encouraged us to visit a home that embodies home monitoring.

Actiontec -- A Visit with Lesley Kirchman

Our visit with Lesley Kirchman, Director of Marketing at Actiontec, was a wonderful change of pace from the theoretical discussions of new products and services to the realities of homes like yours and mine. Actiontec provides the Broadband Home Router that powers Verizon's FiOS Internet Service. Lesley showed us Actiontec's new zControl home management system when we met with her at CES.

Videocam watching Lesley's front door --> Click for larger pictureLesley decided that before Actiontec could sell the zControl system to service providers, she needed to test for herself how it worked in a real home. She had invited us to visit her home to see what she had done and learned as a user. There we saw many devices, including Z-wave light switches and thermostats, IP security cameras, and more. These all connect to Actiontec's home router and are accessible through a common interface at home and outside the home by computer, cell phone or other IP communications device.

Z-Wave, which we've covered previously is an interoperable wireless communications protocol thatís designed for low-power and low-bandwidth appliances. As of June, 2008 there were over 225 Z-Wave consumer products in the US retail channels.

4Home control screen at Lesley's house --> Click for larger pictureAs you might imagine, when theory meets real world there are pesky problems--like how to install things in the wall, how close devices need to be to see each other in a mesh, how easy they are to set up and use, and lots more.

Thanks to Lesley and her colleagues, we'll be confident that when ActionTec's zControl Home Automation Controllers come to market, we'll all be beneficiaries of the learning that came from real world testing.

TiVo -- Champion of the User Experience

Sandy admits to being a cheer-leader for TiVo. How many people counted them out when DVR capabilities started becoming embedded in settops from lots of other vendors? Remember articles like "How to Save TiVo"? Sandy sees products from TiVo and Apple as being the proof that the user experience and ease of use can make a real financial difference to technology companies--something she was never able to convince the executives at the old AT&T.

We visited with Joe Weber of TiVo during our Silicon Valley trip and again at IPTV World Forum. As a supplier to service providers like Comcast and DirecTV, and directly to consumers through the retail channel, TiVo seems to be successfully navigating both sides of a dangerous path.

TiVo Search feature in Comcast DVR --> Click for larger pictureOn the service provider side, TiVo is engaged with cable operators on their roadmaps of what features will migrate into the tru2way environment. They are embedding new features like direct link to on-demand programming and a dedicated HD folder for those who only want HD content. The search feature now includes not only linear but also on-demand content.

Meanwhile, TiVo is intimately engaged in the rapid advances in the IP World and has teamed with Amazon, YouTube, Walt Disney and others in their constant quest to keep consumers engaged with their TVs. They see their DVR as the single device and single remote to browse TV, VOD, movie websites, music websites and user generated content.

TiVo presentation at IPTV World Forum --> Click for larger pictureWeber's talk at IPTV World Forum promoted the notion that IPTV service providers could encourage more DVR innovation by moving away from middleware and toward protocols. Middleware's promise is seductive --"write once and run anywhere" to potentially millions of devices. But he said using middleware requires operators to test core applications across all devices. Worse, it stifles innovation and creates a barrier to new entrants by making it impossible to create new services outside the middleware definition. He recommended moving to a protocol environment, defining communication between the components "but not the inner details of the components."

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