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Startup Nokeena Networks says it’s come up with a way to improve online video viewing and save money for ISPs and content delivery networks (CDNs).

The Santa Clara, Calif.-based company, launched its Media Flow Director “software appliance” today. The company says the software increases server capacity and reduces operating expenses by 50 to 65 percent. So, say 40,000 people want to watch an episode of ABC’s Lost online. With existing software, content delivery networks require 10 1RU servers to distribute 10GB per second, enough to meet that demand. With Nokeena’s software, they’d only need a single 1RU server to achieve the same results.

A more efficient delivery system means that the cost of running 10 servers—buying, maintaining, supporting and storing them—in a three-year period would drop from around $230,000 to about $100,000. That savings includes Nokeena’s service charges.

CEO Rajan Raghavan said the company has no direct competitors, but rather “companies who try to build the software on their own because the software does not exist.” Nokeena has announced one customer, Break Media, and plans to tackle market segments one at a time, beginning with content aggregators like Google and CDNs such as Akamai. Then it will pursue content owners like HBO and Telcos/ISPs including AT&T and Comcast before approaching enterprises and hosting providers like OpSource.

“The idea of clicking on your browser and watching a video seems conceptually simple and, in fact, the amount of hard work it takes to do that is substantial,” said Peter Christy, principal of Internet Research Group, based in Los Altos, Calif. “Companies like Akamai or Google have their own solutions, so Nokeena has to be smart enough to do something that is valuable. We know the Nokeena people from their previous lives. They’re smart and successful, and a good excuse to watch a new venture.”

In the past six months, the industry has seen a dramatic spike in demand for web video, ranging from the user-generated content seen on to President Barack Obama’s Inauguration. U.S. internet users viewed a record 14.3 billion video clips in December, according to a comScore video metrix report released in February. That was up 13 percent from the previous month. More than 78 percent of users watched video online, with the average viewer watching more than five hours of video.

At the moment, Nokeena, which has 25 employees in the U.S. and India, is not looking for more funding. Last August it raised $8.7 million of funding in a Series A round led by Clearstone Venture Partners and Trinity Ventures.


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