The Cutting Edge: Computing / Technology / Innovation : Microsoft Unveils Software for Interactive Video Use

Microsoft Corp. unveiled a computer program code-named Tiger on Tuesday, calling it the first major element in its strategic thrust into the emerging world of interactive television.

Tiger, which relies on low-cost personal computer hardware to deliver audio and video information, will compete with more expensive offerings by companies such as IBM and Oracle, whose software depends on larger and costlier computers. Microsoft’s goal is to become a dominant supplier of software for video servers.

But some analysts said Microsoft’s offering, which may not be available in its fully configured form for years, could prove to be a paper tiger, another example of Microsoft’s well-known strategy of announcing products long before they are available. Critics said the announcement could be designed to dissuade customers from buying a competing product that is already on the market.

Either way, the stakes are high. The market for such video servers is expected to grow from just $50 million this year to anywhere from $1 billion to $5 billion by 1998, depending on how fast cable and telephone companies roll out their promised interactive systems.

At a hotel conference room, Microsoft demonstrated how a single $2,000 Compaq computer outfitted with Tiger could simultaneously send different movies to 16 television monitors, each of which could be fast-forwarded or reversed. Craig Mundie, vice president of advanced consumer technology at Microsoft, said the same computer could “easily support 100 video streams,” a claim that brought looks of disbelief from some engineers in the audience.

A key obstacle in the spread of interactive television has been the high cost of video servers. Most of those used in ongoing trials cost nearly $3,000 per subscriber. Microsoft’s claims suggest costs dramatically lower.

Tiger will be tested in Seattle beginning next year, with full-scale deployment in 1996. A fault-tolerant, “self-healing” function in the system will give it the reliability necessary for large-scale systems, the company said.

Microsoft said Tiger will be available from Intel and Compaq later this year. But the company concedes that early systems will be used for lower-end applications such as hotel video services.

Skeptics suggested Microsoft may have been premature in its announcement.

“Whenever something new comes out, they say they will come out with their own product soon,” said Richard Shaffer, editor of Technologic Partners’ industry newsletters. “A little cage rattling can chill the market for competitors.”

But competitors aren’t shaking in their boots. “They have a long way to go from their roots (in personal computers) to providing everything that is necessary” for large-scale interactive television, said Jerry Held, senior vice president for Interactive Multimedia Products at Oracle.

Oracle, whose system is being used by British Telecom and will be tested by Bell Atlantic and U.S. West, announced Tuesday that its software is available on Hewlett-Packard video servers, as well as its own parallel computer systems.