SkyFire Aims to Tame Mobile Video Growth With Carriers

Skyfire, which has racked up millions of downloads of its mobile browser thanks to its ability to convert Flash video for devices, is now poised to announce its first trial with a tier-one wireless carrier in the U.S. The test will establish how well Skyfire can help operators better manage the explosion of mobile video traffic and signals a bigger play for the startup as it looks to expand beyond its direct-to-consumer business. It also shows how carriers are going to have to get creative as they deal with an onslaught of mobile data use.

Skyfire uses a cloud-based delivery service to stream video on mobile devices. The architecture has proven popular with iOS and other mobile users, who are able to use the Skyfire browser to view Flash video content. The company last year tallied 3 million downloads of its browser, including a free Android version as well as $4.99 iPad and $2.99 iPhone versions. But the secret sauce of Skyfire isn’t in delivering Flash video, it’s in optimizing video on the fly for each mobile device so that the stream caters to the device and network conditions. Essentially, it sends no more data than is necessary at that moment.

That’s what is catching the interest of operators. CEO Jeff Glueck told me SkyFire’s first U.S. carrier trial should be announced by the end of the first quarter. Glueck said SkyFire is also in talks with another major carrier in the U.S., as well as a European operator. He said carriers are interested in Skyfire’s delivery system because it can reduce mobile traffic by 75 to 80 percent by transcoding the video for mobile use. While some mobile video providers — like Netflix — (s NFLX) adapt their streaming video for mobile devices, Glueck said most do not, sending way more data than is necessary for a small screen. By installing Skyfire’s technology into its own data centers, big carriers can reduce the traffic and ensure more bandwidth for all users.

“This is where we want to be, embedding our technology in carrier networks and devices,” said Glueck. “If we can get deployed in the network, we can optimize all video, all apps and almost any format.”

This is could be a key tool for operators facing a data tsunami. Cisco recently reported that worldwide mobile data traffic is set to increase 26-fold between 2010 and 2015, reaching 6.3 exabytes per month, fueled in large part by mobile video. Last year, Cisco said global mobile data traffic grew by 2.6 times for the third year in a row, even with a slow economy, increased traffic offload and the advent of tiered pricing. Video traffic is expected to eclipse 50 percent of all traffic this year and is forecast to reach 66 percent by 2015, Cisco said. With that in mind, it makes sense for carriers to look at Skyfire and other providers like Bytemobile, which has also been active optimizing web traffic for carriers.

Glueck said operators will still likely turn to tiered-data packages and network management techniques to get the most out of their networks and manage usage. But he said Skyfire can play an important role in helping carriers make the most out of their limited resources. Even with the launch of 4G, Glueck said it’s only a matter of time before those networks also experience massive video traffic. Optimizing mobile video will allow carriers to treat all video traffic equally instead of singling out a provider, which is also in line with the net neutrality rules passed by the FCC.

Skyfire can host the traffic themselves for smaller carriers. But in many cases, it makes sense for an operator to license Skyfire’s software and run the software from their own data center. It will better ensure that there are no capacity issues, something that Skyfire encountered briefly when it launched its iPhone browser. Glueck said Skyfire’s approach is likely to be popular with carriers because it can work off of commodity servers and doesn’t require a special hardware.

There isn’t going to be any one solution to head off the coming mobilpocalypse. As my colleague Kevin wrote last year, carriers are also looking to handle increasing data usage through Wi-Fi offload, better idle features for devices, metered payment plans and in-home femtocells. If Skyfire’s trial goes well, add video optimization to the list.

Related GigaOM Pro content: