Taking dead aim at the expanding asset-management market, Sony Electronics has linked up with a leading supplier of asset-management software, The Bulldog Group.
Under terms of the deal, Sony Electronics will be the exclusive marketer of the Bulldog software in the U.S. and Japan and will integrate it into its asset-management systems, the tape-based Petasite and the disk-based NewsBase.
Sony Electronics also picks up a minority stake in the privately held Bulldog. Neither would comment on the size of the investment. But one source pegged it at $10 million.
Sony Electronics joins Sony Pictures on the board of the Toronto-based Bulldog. Other investors include Sun Microsystems; MSD Capital, the venture-capital firm of Michael Dell; and Bell Canada.
The deal positions Sony to capitalize on one of the fastest-growing segments of media technology. According to a Frost & Sullivan study for Sony, the asset-management market will grow to $2.4 billion by 2006.
"We wanted to be early and carve out a strong position," says Ed Grebow, deputy president of Sony Electronics and president of the Sony unit that sells broadcast equipment in the U.S. "Could we have written the software ourselves? I guess, eventually. But this gets us out there very quickly."
Chris Strachan, CEO of Bulldog, says having Sony pushing its software is a "major benefit..Sony is the clear leader in the broadcast space."
Asset-management systems store and index digitized content-video, audio, graphics and text-so that it can be easily retrieved and distributed in any format. TV networks and other content owners hope that such systems will allow them to tap additional revenue by facilitating the reuse of the content.
Bulldog, founded in 1991, has carved out a significant share of the asset-management business. Its clients include Sony Pictures, Microsoft Studios, Disney, Sears, EMI and the BBC. According to Strachan, Bulldog is also working on a video-on-demand service for Cablevision.
Bulldog software manages vast media databases. That "middleware" can be linked with its own user-interface software or that of companies like Virage, Vignette and Convera, Strachan says.
Under Grebow's direction, Sony has become increasingly open to using components and software of other companies to get a jump on the market, or the competition.
The strategic relationship could take many forms. The Bulldog deal, Grebow says, is "a good example of allowing small companies to remain independent and do what they do best: writing software."
Last year, Sony struck a deal with Panavision, under which Panavision now rents HDTV cameras to movie producers along with its regular 35mm gear. In the deal, Sony acquired an 8% stake in Panavision.
The openness also stretches to Sony's systems-integration business, Grebow says. "Though there's the perception that we only integrate Sony products, the truth is that better than 50% of the products we integrate comes from third party companies."