With a deal to sell its VOD software and assets to Harmonic Inc. in place, Entone Technologies will now apply a laser-like focus to its IPTV set-top business.

Entone, explained company CEO Steve McKay, had struggled in the boardroom with the fact that the company had enjoyed moderate success with its VOD and CPE businesses, but had to shed something in order to have "terrific success" with one.

Obviously, the CPE side won the long-term focus for Entone, leaving it up to Harmonic to score the "big prize" in VOD - U.S. cable - in a sector that will now include participation by bigger players such as Cisco Systems Corp. and Motorola Inc. through their recent acquisitions of Arroyo Video Systems and Broadbus Technologies, respectively.

McKay will continue on with Entone as it enters CPE-only mode. Several key players will remain with Entone post the Harmonic deal, including VP of Product Development Mark Evensen, and VP of Business Development Ian Jefferson. Following the closing, Entone hopes to have 50 employees by the end of the year.

"In many ways, the company will look identical to what it did before, except we'll be totally focused on CPE," McKay said. The set-top/gateway business "can't be a part-time business," he added.

Entone will also be able to go full-time on CPE as a well-capitalized entity, thanks to the Harmonic deal, valued at $45 million, $26 million of it in cash.

Entone expects to remain focused on the IPTV CPE category, led by its flagship Hydra products. It has rounded out its family with a hybrid IP/QAM set-top called "Magi," and "Crescendo," an environmentally-hardened network interface device that is installed outside the customer's home. Today, the latter uses HPNA 3.0 networking, though Entone plans to also offer a version based on Multimedia over Coax Alliance (MoCA) technology, as well.

Entone's Hydra box, meanwhile, uses basic RF modulation, a "sleeper" approach that provides a low-cost, albeit analog, solution to delivering standard-def IPTV signals to multiple televisions in the home, McKay said. "It's your workhorse solution, if you will."

A house-full of HDTVs will need a solution with HPNA 3.0 or MoCA, he added.

McKay said Entone has more than 12 deployments with "thousands" of CPEs deployed.

Its flagship customer is Consolidated Communications, which started IPTV deployments with stand-alone IPTV set-tops, but later opted for gateway gear in order to keep deployment costs for multiple-TV households down to palatable levels.