Microsoft extends its stream

Everybody who's anybody in the streaming media market seems to be tied to Microsoft (MSFT), which today made another step toward consolidation of the market around its Active Streaming Format with its purchase of VXtreme.

Microsoft has developed its NetShow client-server solution, which uses the Active Streaming Format (ASF) to regulate the download of audio and video files from a server to a client machine. Overshadowed in the past year primarily by Progressive Networks and its RealAudio and RealVideo products, Microsoft is now using NetShow to create a single streaming file format standard to help "grow the market."

Part of that strategy involves winning the support of other streaming media companies, often by investing in them--as Microsoft has done with Progressive and VDOnet--or by buying them outright.

And Microsoft isn't the only company charging into the field. Oracle will announce next Monday that it is proposing a standard for connecting video encoders and servers for delivering real-time digital video broadcasts, which analysts say is the first signal that the database company is positioning its video software to compete against Internet video market leaders such as Progressive Networks. (See related story)

In addition to making streaming media more popular, Microsoft's strategy aims to add to the software giant's bottom line, as the NetShow 2.0 server, available starting today, will be a free download until the end of the year when it will be bundled with the for-fee SiteServer. The company did not discuss possible prices of SiteServer with NetShow.

SiteServer is part of the BackOffice suite of server products and runs only on Windows NT, Microsoft's business-strength operating system. The company is counting on corporate adoption of NT to drive profits in the coming year.

"We believe that as you add more client-server capabilities, it provides for richer computing and applications, and that of course benefits us," said Microsoft product manager Russ Stockdale.

To that effect, Microsoft group vice president Paul Maritz today stressed the viability of using streaming media within the corporate workplace for applications such as broadcasting conferences or distributing training materials. With the VXtreme purchase, Microsoft gets tools that let content creators author one version of a file and distribute it across several bandwidths.

The companies did not release terms of the acquisition. The VXtreme technology will be incorporated into a future version of NetShow.

Despite the NetShow-centric focus of today's announcements, though, Microsoft managers said there will be plenty of room for competitors to offer their own media server products that support ASF on NT and other platforms as well.

"We evangelize ASF quite broadly and encourage [competition]," Stockdale said. "We expect to see Unix-based servers that support ASF."

In addition to today's purchase of VXtreme and the earlier investment in Progressive Networks, Microsoft also has a minority stake in VDOnet, which makes tools and servers to stream video over high-bandwidth networks.