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Video-conferencing company poised to crack US market

September 01, 2000

Mlabs has invented a true IP-based system and plans to tangle with the likes of dominant players Intel, PictureTel and Vtel for a piece of a US$2 billion video-conferencing pie.

KUALA LUMPUR - Local network research company Multimedia Research Lab Sdn Bhd (Mlabs) is set to enter the US market to push a new desktop video-conferencing system that is substantially cheaper and more flexible than current systems.

Mlabs' head of research Dr Sureswaran Ramadass said the Penang-based company has just received a "patent pending" status from US Patent and Trademark Office for its video-conferencing system.

"We are excited about receiving the patent pending status. It lends our product credibility and paves the way for penetration into the US market and a Nasdaq listing by 2002. We are now scouting around for an appropriate base, either in the Silicon Valley or elsewhere, to set up our marketing arm," he said.

Dr Sureswaran said Mlabs is represented by San Francisco-based legal firm Morrison and Foerster LLP for its patent filing.

On August 22, the company incorporated Mlabs (USA) Inc in Delaware as a fully-owned subsidiary of Mlabs Global.

Mlabs Global is a British Virgin Islands-based holding company set up earlier by Dr Sureswaran and several private investors to be the vehicle for the company's proposed Nasdaq listing.

Mlabs is currently being courted by various venture capitalists. "We expect a high evaluation as we are considered 'infrastructure' and not a 'dot-com'. Also, we are not a start-up, but have a product that has already achieved a certain degree of market credibility. We are in final discussions to close a first round of funding soon," said Dr Sureswaran.

Multimedia Conferencing System
Mlabs' flagship product is the Multimedia Conferencing System (MCS), the result of a seven-year collaborative effort between the Mlabs team and local researchers at the Science University of Penang.

Unlike typical video-conferencing systems, which only allows point-to-point or point-to-multipoint link-ups, MCS is touted as the first of its kind that offers unlimited multipoint-to-multipoint interaction.

"Current videoconferencing is still cost-prohibitive for the average company, because of the proprietary systems and dedicated ISDN lines. Our product is software-based system, uses non-proprietary hardware and is designed to be flexible enough to fit into any existing LAN or WAN environment," said Dr Sureswaran, who is also a lecturer at the university.

MCS allows up to 60 users per server and is scalable by simply increasing the number of servers. It currently supports all IP-based networks including Ethernet, Token Ring, Frame Relay, ATM, FDDI and ISDN and on the client end, supports Win95/98/2000/NT and Linux operating systems.

"On a seat-for-seat cost comparison, MCS' current local version is priced 65 percent less than competing video-conferencing systems," said Dr Sureswaran.

Dr Sureswaran told ZDNetAsia he first began experimenting on the possibility of running high quality video-conferencing on the popular Ethernet bandwidth in 1992.

The breakthrough came in 1997 when he struck on the idea of a distributed network architecture that takes full advantage of the processing power of the network, and delineated a set of specifications which he called the RSW Control Criteria to make it happen.

The new system, which formed the basis of Dr Sureswaran's doctoral thesis, can simultaneously transmit two 16-bit color pictures at about 30 frames-per-second and two streams of CD quality audio. It can maintain a constant bandwidth even when additional servers and users are added onto the conference.

"Our bandwidth requirements vary, depending on the amount of movement within the pictures. Talking heads generally eat up about 120Kbps each stream, but we have gone as low as 30Kbps per video stream," said Dr Sureswaran.

"We have also added a global roaming feature that allows notebook-users to connect and video-conference from anywhere in the world via the Internet or their corporate Intranets. We have managed to achieve this by using a mixture of multicast and unicast tunneling technologies."

However, he qualified that notebook-users will need to install the full MCS client software, and have a minimum 115Kbps dial-up speed on xDSL or ISDN lines, or 128Kbps on a lease-lined link-up. "If bandwidth erodes midway, the transmission quality decreases, but you won't get cut off," he added.

MCS also allows video streaming of movies and recorded meetings and has background accounting feature targeted at users who may need to bill clients later.

Dr Sureswaran said Mlabs is aiming to capture a modest five percent of the global market for desktop video-conferencing systems.

The total market for both desktop and TV-based systems is estimated at about US$2 billion, and is currently dominated by PictureTel Corp, Intel Corp and Vtel Corp.

The company can also expect competition from Web-based newcomers such as WebEx Inc and Astound Inc .

MCS has a variety of applications including intra-corporate meetings, distance learning, telemedicine, inter-government and cross-country communication.

"We are targeting the bandwidth providers as partners, the ISP/ASPs and various corporate users. We hope to set up channels of distributors and resellers and also work with OEMs," said Dr Sureswaran.

Mlabs current customer base includes Japanese manufacturer Showa Denko K.K., Malaysia's Telekom Malaysia, the Penang State government, and various local universities and technology companies.

Julian Matthews is a correspondent from Malaysia for ZDNetAsia.