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Thursday, September 14, 2006

Microsoft's Broken Software (MSFT)(VZ)(BLS)(T)(DT)(BT)(MOT)

Microsoft has been trying to get into the IPTV software business for years with products that handle video server functions, programming guides and home set-top boxes that link to TVs. The company has announced high-profile deals with European telecoms, Bell South, and Verizon.

The problems is, according to the Wall Street Journal, that the Microsoft software doesn't work very well, which is not much of an endorsement for other phone companies using the system for their roll-outs. It is no secret that phone companies what into the IPTV market to compete with cable companies like Comcast that already have the dreaded "triple play" phone company killer of TV, broadband, and voice over IP bundled into one offering.

The Wall Street Journal uncovered delays and technical problems with the Microsoft products that have caused Verizon to put its own software engineers into the business of fixing the issues to the IPTV product can get to market. Motorola, which builds another part of the system, has also been helping to get it up and running.

Verizon is earlier to the IPTV business thab many other telecoms because of its aggressive push into fiber-to-the-home, which drive much faster connection speeds than DSL and most cable installations.

The Microsoft IPTV software is being used by BT and Deutsche Telekom, and according to the Journal it is being tested by AT&T.

If Microsoft doesn't get the issues addressed soon, its foothold in IPTV may begin to disappear.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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