Europe's largest cable operator has come through on its threat to dump Microsoft Corporation because the software giant was unable to deliver its Interactive TV software on schedule. United Pan-Europe Communications (UPC) announced this week that it had chosen software from Liberate to drive its Interactive TV set-top boxes, which will be rolled out in October. According to the original schedule, UPC was to have begun its digital service this month, but Microsoft admitted to the company recently that it was several months behind schedule. This led to a somewhat public spat between the two firms, during which it became clear that Microsoft would not be able to deliver. UPC is reportedly furious at Microsoft for the problems.
Liberate will provide OS software to control the Interactive TV set-top boxes that UPC will give to its customers, providing email and Web browsing functionality as well as video on demand and e-commerce features. For Liberate, the UPC contract is a major coup. "UPC has turned into a 'show me' company now," says Liberate CEO Mitchell Kertzman. "They want to make decisions based on results instead of promises." Microsoft, which is a shareholder in UPC, lost any "preferential rights" it might have had when it failed to deliver this summer, says UPC chairman Mark Schneider. The timing is embarrassing for the software giant, which was recently touting contracts for 15 million Interactive TV set-top boxes. However, none of these have actually been deployed; instead, the figure represents commitments from various cable operators, many of whom are looking at non-Microsoft solutions now as well.
Microsoft has been working on Interactive TV technologies for almost a decade, going back to its "Tiger" video on-demand work from the mid-1990's. The company bought WebTV in a bid to bolster its presence in the market and it has invested in numerous cable companies in both the United States and Europe. Interactive TV is expected to be a huge market in the coming years, and naturally Microsoft wants to extend its reach into this crucial area. But as noted previously in WinInfo, the company tends to perform far less impressively when it cannot leverage its Windows and Office monopolies, as it cannot in the Interactive TV market