Why Opera Software Bought Skyfire

Opera Software will pay up to $155 million for a Silicon Valley start-up Skyfire, which develops tools that optimise multimedia content for mobile devices depending on the available bandwidth. Unlike its competitors, Skyfire offers to do the transcoding on the network operator side, in the cloud.

The company currently counts three large US mobile operators as customers for its Rocket Optimizer and Skyfire Horizon solutions, and is in trials with ten other operators around the world.

It also makes consumer apps that feature its proprietary video compression technology, such as the Skyfire Web Browser. Its iPhone version is particularly interesting, since it can translate Internet video from Flash into an “iPhone-friendly” format, in real-time.

After moving beyond browsers with acquisitions of mobile advertising companies Mobile Theory and 4th Screen Advertising early last year, Opera looks to form new relationships with network operators. TechWeekEurope spoke to Jeffrey Glueck, CEO of Skyfire, who will also assume the role of EVP of the Operator Business for Opera once the deal finalises in March.

Viva la streaming

In essence, Skyfire develops software that detects 3G or 4G connection strength, and compresses multimedia content to fit the available bandwidth, providing users with uninterrupted streaming experience

“Video is increasingly eating more and more bandwidth. It consumes around half of all the mobile traffic around the globe. Then you add popular services like Spotify or Pandora, high-definition photography, and the mobile multi-media traffic starts to approach 80 percent,” Glueck told us.

“Opera is world-famous for the speed of its browsers, thanks to server-side or cloud acceleration, and we develop compression technology for the next generation of the Web, for video and audio streaming.”

The software platform developed by Skyfire provides an average 60 percent boost in network capacity, by reducing the size of content in the cloud. It doesn’t rely on appliances, and offers similar functionality found in Opera’s Mini browser, but without the need to install any software on the device itself.

With Skyfire, users can expect a transcoded result in 200 milliseconds “for every popular video format in the universe”. This is achieved through  something called Network Function Virtualisation, which roughly corresponds to Software-Defined Networks. The technology essentially allows operators to entrust core network functions to the cloud.

“You might think that cloud transcoding would be very expensive,” says Glueck. “People say it requires too much compute power. That’s true if you have hundreds of servers in the network looking at every single packet. Instead, we use Software-Defined Networking.”

Skyfire’s platform ignores 99 percent of traffic, to focus on the connections that really need optimisation. It compares the inbound data with the available bandwidth, and makes changes so the user experience won’t suffer. “All of our compute power is reserved just for when a user is on a congested network and getting a poor experience. We only intervene when you need to, and it’s a very efficient system.”

It looks like Opera’s recent announcement of a switch from its proprietary rendering engine to WebKit might be connected with the acquisition. “It is a bold strategic move and it will free up a lot of their resources to focus on new areas of development,” the Skyfire CEO tells us. “Our technology will become part of the new ‘Ice’ WebKit browser, which is becoming the principle future browser from Opera. It will also have a dedicated Opera Mini mode.”

Skyfire’s own browser is based on WebKit, so this developer team knows what they are working with. “In the long run, we are going to find a way to combine our products in a way to make really innovative apps for consumers,“ says Glueck, while also assuring that for the moment, development of all Skyfire apps will continue.

In the future, the telecoms part of the business, including the Rocket Optimizer platform, could help Opera approach operators in developing markets to promote its lean, budget-friendly browsers.

Both companies will reveal more about their plans at Mobile World Congress in Barcelona later this month.

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