Verizon and Redbox are creating a joint venture to provide movies on demand using the web as well as Redbox’s physical DVD rental kiosks around the country. The deal is seen as a blow against Netflix, which offers a DVD-by-mail and a streaming service, but it’s also a chance for Verizon to make money from streaming content and show off how awesome its fiber network is.

Details around the deal are limited, but here is what we know.

1. Verizon will own 65 percent of the joint venture while Coinstar, Redbox’s parent company, will own 35 percent.
2. The service will offer something Netflix currently doesn’t — a download option, which makes it more competitive with Amazon’s video offerings.
3. The offering will be available nationwide, not merely to Verizon customers.
4. Using Redbox helps the joint venture get access to new releases as content companies are trying to add more “windows” to the movie release process. Windowing is what content companies use to spread out the time between a movie released in theaters, when it hits rentals stores and when it makes its way to other services such as premium TV channels. The general thinking is this increases profits for each movie, but opinion is divided on that, and consumers hate it.
5. Verizon is counting on its existing relationship as a pay TV provider to get more content to the joint venture.
6. Whatever the end product looks like, it will launch in the second half of this year.

Given these facts, as scant as they are, it’s easy to see the threat to Netflix, as people could view the two offerings as fairly interchangeable as long as the pricing is competitive and the content is relatively equal. But without knowing about pricing or the content, the deal still has the potential to be a win for Verizon, given video is huge bandwidth suck on wireline and wireless networks. Netflix traffic was estimated to take up 20 percent of U.S. broadband traffic during peak hours according to Sandvine in the fall of 2010.

For Verizon, a streaming joint venture has three benefits. One, if it makes money from the service, that’s an additional revenue stream as well as a way to capture some value from its customers who cut the cord. Two, if the service can really deliver a video product that consumers love and will use, it will help drive traffic across Verizon’s networks. Customers in the FiOS areas will have a reason to sign up for the service if they haven’t already, while the joint venture will help drive traffic to mobile devices and other areas of the country. Verizon has a business selling bandwidth on 100 gigabit per second backbone pipes as well as leasing its fiber to cell phone providers to use as mobile backhaul.

Finally the joint venture gives Verizon a seat at the table with content companies as the industry tries to find new economic models based on the reality of an IP infrastructure that can deliver any content to anyone, anywhere. Sure, content companies are fighting the future with windowing and complicated rights agreements, while ISPs are trying to protect their business with broadband caps, but the future is coming, and Verizon is trying to get in on the ground floor rather than watch it pass it by.

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Sumo Logic emerged from the shadows Tuesday with million in Series B funding from Sutter Hill Ventures, Greylock Partners and Shlomo Kramer bringing its total to .5 million since its founding in April, 2010. Greylock and Kramer also participated in the Series A round.

The company, founded by Arcsight veterans Kumar Saurabh and Christian Beedgen, aims to bring log monitoring and analytics to cloud computing environments via a software-as-a-service model. In that arena, Sumo Logic is bound to face off against Splunk, which filed for a 5 million IPO two weeks ago, as well as Loggly, a company that spun out of Splunk (see disclosure.)

Computer logs —  and other machine data — are an important component of the big data phenomenon. This machine data, if collected, analyzed and searched — provides important insights into how systems and applications are working (or not) and can pinpoint bottlenecks, server errors, and other glitches before they get out of hand.

“As infrastructure gets more complex, there are not only more systems and more heterogeneous systems but not everything sits in the customer data center anymore,” said Beedgen, who is also Sumo Logic’s chief architect and director of engineering. That means on-premises logging systems — which he contended are expensive to maintain and upgrade — are on their way out.

“The idea of sitting in a data center with a nice perimeter around it and just listening to what’s happening there isn’t going to cut it anymore,” Beedgen said in an interview Monday. The trick is to see out into a customer’s computing infrastructure regardless of where it is running. Once those logs can be viewed and monitored, forensics can be applied to pinpoint and trace security threats or other problems.

The service has been in use by select customers including Roblox and Ooyala, for a few months. Roblox, the online gaming company, integrates Sumo’s service into the Amazon Machine Images (AMIs) it uses to run its business. These “instrumented” AMIs give Roblox visibility into its Amazon infrastructure, Beedgen said.

The ability for companies to have a window into their compute infrastructure, wherever that is, will only get more important as more workloads move out of the customer’s own data centers and into the cloud. For more on this big data phenomenon, be sure to check out GigaOM’s Structure: Data Conference in New York City March 21 and 22.

Disclosure: Loggly is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Photo courtesy of  Flickr user 401K

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Dwolla, an alternative payment system built off cash networks, has quietly been on a roll in its first year, hitting  million in daily transactions in July. Two weeks ago, the Des Moines, IA start-up eliminated fees on transactions for less than , another big step in its bid to replace credit cards.

Now the company is celebrating its first year on the market by introducing a new feature called Instant that addresses one of the lingering pain points in the system: the three to five day delay users face when accessing cash. With Instant, users can deposit money and send cash without the existing wait time built into Dwolla. It will cost users a month to access Instant, a charge that can be opted out of at any time if users aren’t actively using the feature. Users can also have Dwolla pay for an item immediately, up to 0, as long as they pay back the cost within a month. There’s a late fee if people don’t bring their remaining instant balance to by the statement date. But the Instant features gives users flexibility to pay for items immediately, like they do with a credit card and yet not incur big charges.

The idea is that Dwolla is trying to eliminate any barriers to people accessing its network. It’s still going with its main selling point: a 25 cents fee for each transaction over . Users can load up a Dwolla balance or connect their account to a bank account. Dwolla still ensures the same type of security by not transferring personal data with each transaction. Dwolla users can pay friends using the system over social networks or pay for goods online or in store.

The Dwolla system is especially attractive to merchants because it caps the amount of fees they pay for transactions. It’s much cheaper than credit card companies, which can take 2-3 percent and 30 cents for each card transaction. This is especially important for businesses that receive larger payments. The feature works online, and will be coming to iOS and Androiddevices soon.

Dwolla CEO Ben Milne

Dwolla still has a ways to go to gain traction and compete with companies like Square, PayPal and the traditional credit card companies. It has about 70,000 users right now, and several thousand merchants using the system. But it’s catching on with business and consumers who approach this next generation approach to payments.

Dwolla CEO Ben Milne told me that the moves are part of an effort to improve the Dwolla architecture, making it faster, easier to use and safe. He said the big opportunity is in being an alternative to ACH payments, which is a trillion market. So far, 89 percent of the transactions are between businesses and consumers with the average transaction more than 0 to 0.

Milne admits the company has a lot to do to get the word out. But he insists being in the midwest has not hurt Dwolla. In fact, being outside of the finance capital of New York or the tech center of San Francisco has allowed it to understand what the average user wants in a new payment system. Now with Instant, Milne hopes Dwolla is at a turning point as it sharpens its message and value proposition for consumers and merchants.

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Pssssst… wanna buy some Kodak patents? The venerable photography firm has decided to unload a fair chunk of its IP — 1,100 patents, give or take — to boost its bottom line. You see, Kodak’s got cash flow problems, and it thinks selling a portion of its portfolio is part of the solution. The company must’ve seen dollar signs after Nortel made a mint selling its patents, as Kodak’s now marketing its IP merchandise using the same firm that helped Nortel do its record deal. Strong move Kodak, now if you can just settle up with Apple and RIM, you’ll really be in the money.

Kodak shopping its IP wares, looks to cash in on the patent buying craze originally appeared on Engadget on Thu, 18 Aug 2011 08:52:00 EDT. Please see our terms for use of feeds.

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Peter Sonsini

Apple’s iCloud has brought consumer-focused cloud computing into the limelight recently, and the trend probably represents a golden opportunity for startups looking to raise venture capital. However, the brunt of investment won’t necessarily go toward companies trying to compete with Apple or launch their own consumer clouds.

According to New Enterprise Associates partner Peter Sonsini, the key to getting VC investment in cloud computing is still selling the infrastructure tools that underlie popular cloud platforms.

During an interview earlier this week, Sonsini told me that although consumer cloud services are hot, much of the investment money still comes from the enterprise software and hardware upon which those clouds are built. Whether it’s Apple, Dropbox or anyone else targeting consumers with new cloud services, the one commonality across the board is that they’ll need to buy some cutting-edge IT products. Not that this should be surprising coming from Sonsini, who was part of VMware’s early executive team and whose investment portfolio reads like a who’s who of the cloud.

As senior director of strategic alliances during VMware’s formative years, he learned early on how important virtualization would come to be. When he got into the VC game, one of his first investments was open-source virtualization startup XenSource (which Citrix bought and which still provides the moniker for Citrix’s virtualization lineup). Among his current companies are PaaS pioneer Engine Yard, private-cloud vendor Eucalyptus Systems, .NET-cloud enabler Apprenda and Hadoop Distributed File System alternative MapR. On Wednesday, virtual-machine-storage specialist Tintri announced that NEA co-led an million Series C round. It’s one of Sonsini’s deals.

I asked Sonsini his feelings on Eucalyptus, which has garnered a lot of criticism (fairly or unfairly) since OpenStack burst onto the scene and stole Eucalyptus’s open-source cloud thunder. He noted that NEA invested in Eucalyptus pre-OpenStack, but that he thinks a strategy adjustment can right the company’s ship to the degree it’s even off-course. These things always come along, he added, and you just have to deal with them. Regardless, NEA is still “very bullish” on private clouds, Sonsini said, calling them a “top five” initiative for most of the CIO types he speaks with.

Apprenda also sells private-cloud software, although it’s targeted toward creating Software-as-a-Service platforms for .NET applications.

Other than cloud and general enterprise infrastructure, Sonsini said other areas of interest for him are big data (hence MapR) and the consumerization of IT.

Feature image courtesy of Flickr user stevendamron.

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As the saying goes, everything’s bigger in Texas, and that includes Texas Instruments’ (TI) share of the semiconductor market. The Dallas-based firm announced today that it will pay .5 billion for National Semiconductors. With the acquisition complete, National will become a branch of TI’s analog segment, which is now positioned to make up 50 percent of the company’s revenue. According to a joint press release, TI held the biggest chunk of the analog semiconductor market in 2010 at 14 percent, and with the new addition that number’s bound to get even bigger. Full PR after the break.

Continue reading Texas Instruments to acquire National Semiconductors for .5 billion in cash money

Texas Instruments to acquire National Semiconductors for .5 billion in cash money originally appeared on Engadget on Tue, 05 Apr 2011 03:09:00 EDT. Please see our terms for use of feeds.

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