Intel’s Vision for the Digital Home

By Al Bredenberg

A news item that appeared on TMCnet on Dec. 29, 2004, provides some fascinating insights into Intel Corporation’s vision of the future digital home:

Intel Boosts Investment in the Digital Home

The release tells about three companies recently added to the list of companies receiving investment from Intel Capital, the chip manufacturer’s venture capital arm. The three companies, Gteko Ltd., Synacor Inc. and Zinio Systems Inc., each received funding under Intel’s Digital Home Fund initiative.

In explaining the purpose of that fund, Intel’s Web site quotes John Miner, vice president and Intel Capital president: "As more entertainment and educational content becomes digital, people want to edit, manage and access that content and share it among multiple devices including TVs, stereos, PCs and handhelds. The Digital Home Fund is designed to complement Intel products and accelerate development of key technologies and content which enhance and simplify the digital home experience."

A look at each of these three unique companies gives clues into Intel’s product strategy for home digital technologies, and the company’s thinking about what the future holds for IP communications in the consumer space.

Gteko Ltd.

Gteko, an Israeli company, has developed suites of products and services that address the enormous problems consumers have with setup, maintenance, networking and troubleshooting for home computing products. For example, Gteko offers a Self-Healing Suite that replaces the human administrator with an automated system that constantly checks and monitors a home computing system, identifies problems and offers automatic fixes.

Intel’s press release refers to Gteko’s Home Network Suite, which automates network functions, such as first-time setup of a home network. The mention of home networking in Intel’s press release suggests to me that Intel has recognized reliable networking as a crucial technology for the future of the digital home, but one that requires better solutions – thus the funding of Gteko.

I can personally testify to the support and usability problems associated with home networking. I’m an advanced computer user and have been working with personal computers for over 20 years, but I still have incredible frustrations resulting from the repeated failure of my home network. If IP communications are to make significant progress in people’s homes, networking is going to have to become easy, seamless, invisible – a non-issue. My bet is that Intel is betting on Gteko to help make this happen.

Synacor Inc.

Intel describes Synacor as “applying the cable TV business model to the Internet,” bundling premium Web content from many sources so a branded content package can be offered by ISPs to their customers through one integrated portal.

To me this indicates Intel’s recognition of the possibilities for making money from Web-based content. So ISPs, Intel would say, need to go beyond merely providing the pipelines for consumers to access the Internet – they also need to become providers of private-label content-related services and applications that add value for customers beyond the basic Internet access service.

From a personal perspective, my gut response to this idea is that I am well enough aware of how to get access to the Web content and services I need and am capable of doing my own consolidation. So I am unlikely to value this kind of service as a user and would probably not make use of it even if my ISP offered it for free. But I can see that the average consumer might value having someone available to find and filter various content sources and act as middleman for access and settlements for premium content.

However, that’s assuming the current situation, in which Web and TV content sources are delivered separately. But once Internet, television, music, audio, games, data, voice and other services begin to be delivered via one converged IP platform, it could become much more valuable to have prepackaged services vetted, acquired, organized and delivered by a knowledgeable middleman or syndicator, who’s able to make it all happen in an easy, usable way.

Zinio Systems Inc.

Zinio is a digital magazine publisher that has so far delivered online over 26 million digital versions of over 200 popular magazine titles. That’s not to say that nobody’s buying paper magazines anymore, but with the increased costs of paper and postage, digital publishing is a good alternative for publishers, especially for reaching overseas audiences.

Here at TMC, we have begun publishing Customer Inter@ction Solutions and Internet Telephony in digital format, with more titles to be rolled out soon. In less than two months, digital subscriptions have already reached about 10,000 combined. (Go here to find out how to subscribe.)

I’m pretty sure that Intel is investing in Zinio in recognition that the spread of broadband access is going to make it increasingly feasible for consumers to download digital publications. As reading devices such as ebook readers, tablet computers, and electronic paper improve, consumers will likely become more accustomed to reading on devices and will become less tied to conventional paper. Also, electronic publications allow for interactivity in ways not possible with paper, as well as integration with multimedia content, which will become increasingly available over converged IP networks.

So it seems to me that these new investments by Intel indicate where the company sees communications heading in the near future. The company feels that it is valuable to support the products, services and companies that are helping to bring about converged communications on the PC-based platforms for which Intel provides so much of the key technology.

Intel Capital plans more investments in a similar direction in the near future. Intel’s statement quotes Scott Darling, Intel Capital vice president and director of Enterprise and Digital Home sectors: "We plan to continue to invest next year in companies that enable PC and CE devices to work together easily and in companies that deliver premium content services over IP networks."

AB -- 12/30/04