pMedia, Inc. is a network software company. Its product, a parallel media gateway (PMG), is a server
that binds telephony and data network services to registered endpoints. It enables an enterprise network
to offer priority, event-driven subcriptions to certain types of data, concurrent resources such as bundled
Quality of Service (QoS) for Internet telephony and streaming media, and intelligent device switching and
In the following example, a bank uses the PMG in a real-time, event-driven Customer Relationship
Management context. A bank customer seeking to refinance a home mortgage wishes to be notified if
rates are lowered. The customer subscribes to this topic - if the Fed acts, and the bank drops its rate, call
or page the customer and establish a conference connection with the appropriate bank officers. The
telephone conference is a result of a real-time event, in this case the receipt of a data message about a
certain topic. It could also be triggered directly from a streaming media news server. The use case is
equally valid for a corporate treasurer reacting to changes in commercial rates.
Based on Sun's J2EE Java development platform, the PMG server integrates proprietary XML-based
middleware with streaming data and telephony interfaces from vendors such as Cisco Systems and
RealNetworks. This open framework supports numerous solutions in other vertical markets as well.
The market for real-time collaboration software is growing rapidly. Companies like WebEx offer services
such as conference calls, application sharing, and interactive event scheduling. The PMG provides two
additional services: the predictive ability to identify events relevant to an individual's preferences, and the
ability to switch the transmission of information in real-time based on the location of the user.
Woody Lewis, CEO, was part of the Internet Business Solutions Group at Cisco Systems, where he
advised corporate clients in the financial services, service provider, and media markets. Prior to Cisco,
he was a senior Internet Architect at IBM, where he designed and built key components of large-scale
Web applications. He has also held positions in corporate finance at Salomon Brothers and Citibank, and
has an MBA in finance, and BA in music from Columbia University.
pMedia is seeking $3 million in equity financing to develop the PMG server and win enterprise customers.
Product will ship 9 months after funding.
Confidential Business Plan - pMedia, Inc. 1
pMedia, Inc. is a Delaware corporation, recently converted from an LLC. Its business is the design and
development of network software, and its product, a parallel media gateway (PMG), is a server that
enables event-driven telephony and collaboration in a streaming media context. pMedia has applied for a
patent on the proprietary design and protocol contained in the PMG framework.
pMedia bridges two key growth industries: Real Time Collaboration (RTC) software, and Internet (IP)
Telephony. RTC applications include audio conferencing, data conferencing, and videoconferencing.
While pMedia's product includes an audio component, it also falls into the data conferencing category, the
most active RTC sector with a 111% 1998-99 growth rate. Estimated average annual rate over the next
four years is 64%, significantly higher than the 1999 rates for audio conferencing (19%) and
videoconferencing (25%). The entire industry will grow from $8 billion in 2000 to an estimated $17.7
billion in revenue by the year 2003.
Internet Telephony volume is projected to grow to 135 billion minutes in 2004, from 2.7 billion minutes in
1999. This translates to $480 million to $19 billion in service revenues. Internet Telephony and Voice
Global VoIP & Data/Voice Convergence Markets
2000 2001 2002 2003 2004
Global VoIP Gateway Revenues
Global Call Center Market
Global VoIP Equipment
Global Revenue for VoIP Services
Voice/data WAN convergence equip & services
Sources: IDC, MMTA, Synergy Research, Killen & Associates, Infonetics Research 1998-2000
over IP (VoIP) Packet gateways will dominate the signaling gateway market over the next several years,
representing 82 percent of the total $587.8 million in sales revenue this year alone, according to a new
report by Insight Research.
VoIP Packet and Internet Telephony gateways are fundamental to the long-term plans for global carriers.
Carriers are being forced to create network architectures that will allow customers to integrate, access,
and share data regardless of geography, technology, protocol, and organizational boundaries. By
deploying gateways, carriers have the flexibility to configure their networks to meet their customer's
needs. Carriers can protect their massive investment in existing infrastructure while still designing
innovative services that operate on IP packet networks.
Confidential Business Plan - pMedia, Inc. 2
Billable Network Services
"The killer 3G application is really for the operator, and it's his billing systems…….It's going to be the ability to not
only charge the user for minutes of use, but charge them for packets of data, charge third-party application and
content providers for transaction-based services….."
Scott Erickson, SVP, Lucent Technologies.
Billable network services and voice/data convergence on the network go hand in hand. Today's most
prevalent portable IP device is the Internet phone. Qualcomm has just announced what it describes as
an open applications platform for CDMA wireless devices called Binary Runtime Environment for Wireless
(BREW). This is meant to "enable development of very feature-rich applications and content while
reducing memory overhead and maximizing system performance". BREW communicates with handset
integrated circuits and system software, and will "enable carriers to differentiate their products and
services and increase airtime usage while maintaining optimal bandwidth management". (Source - press
release, Yahoo Finance, 1/31/01).
The converged infrastructure has been the goal of many software and hardware companies. Openwave
Systems, Inc., a software provider that resulted from the merger of Phone.com and Software.com, has
just announced a partnership with Cisco Systems, Inc. to offer carrier customers a unified messaging
system. This system will combine Openwave's unified communications software with Cisco's AS5300
Voice Gateway (see High Level Architecture diagram below for pMedia's use of the same product).
(Source - press release, Yahoo Finance, 1/31/01).
Nortel Networks has announced a coming new technology that will enable carriers and service providers
to "deploy intelligent gear that allows networks to identify Internet users….". Based on its acquisition of
Alteon WebSystems and Shasta Networks, this Nortel technology will allow a Web movie viewer to pay a
service provider a small additional fee for temporarily improved bandwidth. This is a textbook definition of
Quality of Service (QoS is a standard measure of network availability). Savvis Communications Corp. is
deploying this technology at its main office, which provides network services to large financial institutions
and sees value in prioritized messages to selected users. (Source - Wall Street Journal, 1/30/01).
There is a strong value proposition for the media and entertainment sector as well. Personalized
distribution of audio (including voice) and video content is one of pMedia's focal points. Guaranteeing
reliable Webcasts and enabling shared voice applications during those events is a growth business.
RealNetworks has signed more than 150,000 subscribers to its GoldPass monthly streaming content
service, and recently added live audio feeds of every NBA game. RealNetworks also recently formed an
alliance with Nokia, and is actively promoting the distribution of streamed content to handsets and other
Recently, Portal Software, Inc., a leading provider of software that manages billing services, won a multi-
year contract with AOL Time Warner. In the midst of a slowdown in service provider demand for such
services, AOL clearly recognizes the need to manage the billing of transactions for many new forms of
online content from its merger partner. Media distribution is only effective when billing and privacy issues
Confidential Business Plan - pMedia, Inc. 3
Enterprise Streaming Market
The market for real-time, enterprise data streaming is growing significantly, as evidenced by the success
of CCBN.com, the leading Webcaster of corporate earnings calls. In this particular sector, there has been
a huge increase in corporate demand as a result of new disclosure regulations designed to level the
playing field. By accessing a pre-announced, scheduled audio stream of a telephonic event (conference
call), an individual investor and an institutional analyst receive financial data at the same time.
Notwithstanding this increase in corporate streaming, there remains a need for embedded messaging.
An individual can proactively determine the schedule for future calls, and may join an email list to receive
notification when such calls are scheduled. However, in the absence of such action, there is no way to
automate the process. Without the ability to subscribe to a particular topic (in this case the topic would
be "quarterly earnings calls from Company X"), an interested party might miss the call. Since subscribing
to a topic like certain news stories or sports scores is a familiar process to users of sites such as
my.Yahoo.com, there is a unique opportunity to offer priority access to streaming data. Whether it is a
digitized conference call, or a large-scale media event with a worldwide audience, intelligent allocation of
network resources based on user preferences and real-time events guarantees a QoS level that does not
currently exist in a uniform way.
Confidential Business Plan - pMedia, Inc. 4
The PMG solves several problems encountered by businesses engaged in real-time communication.
Viewers of online media events face uncertain quality of service (QoS is a standard measure of network
availability). As more individuals attempt access, denial of service occurs as the number of attempts
exceeds the number of available connections to streaming video servers, for example. A standard open
framework is needed to offer reservations or priority access to specific individuals, based on identity and
preference. The PMG accomplishes this through the use of publish-subscribe, messaging, and other
The market for real-time collaboration software is growing rapidly. Companies like WebEx offer Web-
based conference calls, application sharing, and interactive event scheduling. However, two important
features are missing from these products: the predictive ability to identify events relevant to an individual's
preferences, and the ability to switch the transmission of information in real-time based on the location of
the user. The PMG offers these features as well.
The PMG aggregates four information network attributes: priority access to users recognized at log-in,
priority topics of information as pre-defined by the user, concurrent disparate services such as streaming
video and Internet telephony, and data optimization according to device. The server interfaces with a
client via an event loop - the client periodically signals the server and is updated via streaming XML in the
context of these attributes.
Confidential Business Plan - pMedia, Inc. 5
Through the use of this framework, a user can schedule viewing of a future Webcast. This scheduling
can be conditional, as the result of an event such as a stock price falling below a certain level, or the
announcement of limited viewing for certain entertainment events.
If the user has subscribed to the appropriate category of event, she will be notified in real time when the
event occurs. This combines a universally popular network application feature (Instant Messaging) with
the ability to receive streaming data.
Confidential Business Plan - pMedia, Inc. 6
By bundling the delivery of heterogeneous network services, the PMG provides the user with uniform
QoS. Through the use of common protocols such as RTSP and RTP, as well as APIs to network
hardware, the PMG binds different data types together and to other services such as circuit-switched
The PMG also stores device-specific information. Along with predetermined user preferences, this
enables optimal receipt of real-time data. The network literally knows the most likely endpoint at any
Confidential Business Plan - pMedia, Inc. 7
The PMG addresses an open framework, defining data endpoints such as Web browsers, IP telephones,
and PDAs, and telepony endpoints such as PCS cellular phones and conventional PSTN stations. It uses
a proprietary streaming XML protocol to communicate with clients. Through the use of products such as
the Cisco VOIP Gateway and the Cisco CallManager, telephony conferencing can be integrated into a
real-time streaming data context.
By embedding tagged meta-data into streams of various media types, the PMG creates a virtual bus of
network services. Data, messages, and content are available across a grid of space (location as defined
by the device) and time (status as future, real-time, or archived event).
Assets = Distributed Data Streams/Content
Applications over Infrastructure
Publish/Subscribe & Peer2Peer
Physical Locus = Stationary/Mobile Locations
Time Line = Past/Present/Future
Confidential Business Plan - pMedia, Inc. 8
A PC client offers several channels of communication via XML messages. Macromedia Flash 5 has built-
in XML capability, and RealNetworks' RealPlayer may be extended through the use of plug-ins to stream
this type of data.
A. HTTP Event Loop - Web client pings Web server upon startup/login. Web server connects to pMedia Gateway (PMG).
PMG determines device type, location, other real-time attributes. Client also requests custom datastream from
B. Macromedia Flash with XML - Client receives updated profile,scheduling, and Flash interface information from PMG.
Device interface constraints part of XML schema and PMG protocol.
C. Meta-Data Ingestion - Tags containing meta-data are either embedded real-time into stream or sent via a parallel stream.
Data sources include text ingestion, pattern and color recognition of video, speech recognition of audio including telephony,
and other 3rd party tools. Meta-data protocol is proprietary PMG XML-based framework.
D. Live or Archived Media - Streams are encoded real-time or archives are served from stream server.
E. Stream Client BackChannel Communication to Stream Server - Client communicates info re: bandwidth and data flow
directly with stream server. Traps user interaction via applications such as word-processors, calendaring, email. Can
facilitate real-time semantic search of underlying media streams. Can include voice/telephonic tags by locally encoding
them for addition to the stream (remote audio notation of media).
F. Archived Internet Telephony Audio - Audio from telephony endpoints digitized as separate files and archived for selected
or multiplexed playback.
G. User Interaction between Web Client and Telephony Endpoint - Where supported by endpoint features (e.g.- IP
cellphone rings with voice/audio while embedded Web browser shows data).
H. Telephony PBX Services - PMG addresses IPT/PSTN infrastructure through gateways (e.g. - Cisco AS3300), switches,
and other devices.
Confidential Business Plan - pMedia, Inc. 9
Development of the PMG server will be driven through a nine-month cycle. The following milestones will
be met by aggressive, hands-on project management:
Day 1 - Engage team
Day 91 - Drop alpha version
Day 121 - Drop beta version
Day 181 - Drop version 1.0 to first customers
Design reviews and code reviews will be held regularly. Initial specification and feature set will be
modified only during alpha. Beta version will be deployed to strategic alliance partners where
appropriate. Interface usability testing will be outsourced and begin during alpha. Initial supported clients
will be Macromedia Flash 5 and RealPlayer/Windows Media Player. These will be followed by IP/WAP
handsets and Palm PDAs. Development for set-top box devices will begin after year 1.
pMedia will target major vertical market sectors, with the immediate goal of gaining a showcase enterprise
customer in each. These sectors include financial services, media and entertainment, and distance
learning. In addition, competitive local exchange carriers (CLECs), and service providers (ISPs and
ASPs), will be targeted as channel partners and value added resellers. Strategic alliances with
companies such as Kasenna, Cisco Systems, and RealNetworks are currently in discussion.
Confidential Business Plan - pMedia, Inc. 10