In 1999, Citrix released a product called VideoFrame. This new product was designed to make up for the audio and video shortcomings of server-based computing. In essence, it was an early audio/video streaming server. As good as it sounded, the product failed. By the end of 2000, the product was written off. The company that started VideoFrame was VDOnet which was acquired in July 1998. The filing with the SEC explains what happened:
Acquired technology associated with the APM and VDOnet acquisitions were written down in the fourth quarter of 2000, as further discussed below under. “– Write-Down of Technology.”
VDONET
The in-process research and development acquired in the VDOnet acquisition consisted primarily of one significant research and development project, ICA Video Services. This project allows video applications and applications containing video to be viewed on an ICA client, and was targeted for the server-based computing market. At the date of the acquisition, VDOnet was shipping a client server video streaming product that was not operational in a Windows NT or in a MetaFrame environment. VDOnet was in the process of modifying its software to be operational in a Windows NT environment. In addition, VDOnet was developing enhancements that would provide for a live camera feed and multicast, which was intended to direct a video stream to multiple client devices simultaneously. The Company estimates this project was less than 65% complete at the date of acquisition. The aggregate value assigned to the in-process research and development was $2.4 million.
Following the acquisition, the Company continued the process of modifying the VDOnet software to be operational in a Windows NT environment. Subsequent development efforts resulted in the VideoFrame 1.0 product, which was shipped in the third quarter of 1999, but has resulted in few sales to end users. Since the acquisition, the Company explored alternative uses for the acquired technology. These uses related primarily to delivering video applications in a server-based computing environment and video streaming with ICA devices. Currently, the Company has no plans to further develop this technology.
Further down, it becomes very clear:
In July 1998, the Company completed its acquisition of VDOnet Corporation Ltd. The acquired core technology consisted primarily of the ICA Video Services project which allowed video applications and applications containing videos to be viewed on an ICA client. Subsequent development efforts resulted in the VideoFrame 1.0 product, which was shipped in the third quarter of 1999, but has resulted in few sales to end users. Since the acquisition, the Company has explored alternative uses for the acquired technology. By the third quarter of 2000, the Company was exploring uses related primarily to delivering video applications in a server-based computing environment and video streaming with ICA devices. In the fourth quarter of 2000, the Company reviewed potential modifications to its cash flow projections based on alternative uses for the technology. As a result of its evaluation, the Company did not believe that there were sufficient projected cash flows to support the carrying value of the core technology. As a result, the Company recorded a write-down of $1.8 million, representing the net book value of the VDOnet core technology as of December 31, 2000.
The fate of VideoFrame was sealed. It would take another 2 years to die completely.
The idea to support audio and video much better was sound. Based on the evidence, it appears that this product was just not mature enough to actually do it well. Audio support already existed with MetaFrame but it would not be until RAVE (SpeedScreen Multimedia) appeared that video would be possible.
It has always been difficult to get decent audio and video support in all scenarios. The basic problem is that streaming solutions expand the payloads before the client has a chance of getting the audio/video data. RAVE solved the problem for Windows Media Player by sending the data to the client without expanding. Unfortunately this did not include all video players. Work now being done with Apollo hopes to address more players.
Much of this works just natural evolution. Things are gained from past experience, especially if previous products fail. The hope is that eventually certain issues will become extinct.
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