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Sun, Microsoft ink streaming deals

Two new partnership deals underscore the growing interest streaming multimedia providers are showing in the corporate intranet market.

As corporate intranets increasingly employ multimedia technologies, streaming multimedia providers are clamoring to supply them with solutions.

Today brought announcements of two solutions, one from Sun Microsystems (SUNW) and RealNetworks (RNWK), and another from Starlight Networks and Microsoft (MSFT).

Sun and RealNetworks agreed to optimize RealNetworks' streaming audio products for Sun's enterprise computers. The deal will result in the porting of RealNetworks' RealEncoder and RealPlayer to the Solaris operating environment and the development of a RealPlayer based on the Java media framework. This JMF RealPlayer would play video and audio without plug-ins.

The companies also will comarket their products.

Starlight announced that it will integrate its streaming video products with Microsoft's NetShow line of streaming products. Starlight also will sell intranet solutions and services based on the integrated product lines.

Starlight chief executive Jim Long lauded his company's agreement with Microsoft as a significant step toward a simplified streaming market.

"We're trying to make things easier so the whole video market grows faster," he said. He noted that his company already has a Sun-based system, and that Microsoft supports RealNetworks' streaming software. He added that not only Microsoft and Sun but also Starlight support streaming technology from Vivo Software.

"Growing the market is clearly in the interest of us technology bozos," he said. "Customers can't work with us unless it's easy."

Microsoft's investments in streaming technologies have been the targets of Justice Department investigations. Last year, Microsoft acquired streaming company VXtreme. It is also an investor in VDOnet.

Notwithstanding his expansive view of the streaming market, Long said his company was the industry leader in intranet streaming. "Our focus has always been the enterprise, which includes sales and marketing automation, corporate communications, and training and learning."

In a conference call earlier today, Sun vice president of market development Mark Tolliver stressed the emerging importance of streaming multimedia to the intranets market. He also predicted growth in the use of streaming technologies in e-commerce applications.

"We're seeing streaming audio and video become an increasingly important part of Web content today," he said.

RealNetworks chief executive Rob Glaser called the deal with Sun an "honor" for his company and predicted an improvement on the quality of his company's Sun-optimized products, including greater reliability and scalability.

The combined products could be used either to broadcast multimedia content on heavy-volume Web sites, or to broadcast what the companies are deeming "near-broadcast-quality" content across high bandwidth lines such as xDSL and cable connections.

International Data Corporation analyst Joan-Carol Brigham said the deal was important for Sun to keep up with Silicon Graphics' media-based server (which incorporates RealNetworks products) and to anticipate the announcement from Starlight and Microsoft (which is a RealNetworks investor and which supports the company's technologies in NetShow). But she also said that while Sun needed to have the multimedia capabilities as a "check-off item" in its intranet product line, the video portion of the package was not a particularly necessary item for most corporations.

"It's never really mission critical," said Brigham. "There are situations in which it gets used, but it's not much of a revenue generator. Audio is more interesting--it's useful without being a real bandwidth hog."

The announcements come as RealNetworks has sharpened its focus on the corporate market. The company last month announced that Fore Systems, Fujitsu Network Communications, Novell, and Tandem, among others, had joined the more than 100 companies that use the company's products in their corporate intranets.

In related news, Audible announced a deal with RealNetworks to provide a bundled solution with Audible's RealAudio recording device. The bundled solution should be available from RealNetworks next week.