Video-on-demand server specialist Concurrent Computer Corp. said it has entered into a strategic alliance with Thirdspace Living Limited, a supplier of video server system software for DSL-based VOD services.

In addition to lending its video server expertise to the budding VOD firm, Concurrent has become a shareholder in London-based Thirdspace, joining Alcatel and Oracle Corp. Tied to that, Concurrent and Alcatel have together invested $16 million in Thirdspace's second round of funding. Additionally, Thirdspace has licensed its patent portfolio (13 patents and 14 patents pending) to Concurrent.

Under terms of the strategic alliance, Concurrent and Thirdspace agreed to jointly develop and market iTV and VOD systems to DSL network operators. Specifically, the combined technology package will be comprised of Concurrent's MediaHawk video server and Thirdspace's OVS Open Video Server Software (formerly Oracle Video Server) and its Application Server software. Alcatel, the largest supplier of DSL equipment, will contribute to the alliance its relationships with network operators.

For Concurrent, which has VOD deployments with cable operators such as Comcast Corp., Cox Communications and Time Warner Cable, the agreement could give it more leverage outside the cable sphere.

"The end-to-end interactive television platform being created with Thirdspace will be of tremendous benefit to the broadband telecommunications carriers, Concurrent, and our strategic partners," said Concurrent President and CEO Jack Bryant, in a press release.

The addition of Concurrent to the Thirdspace project comes as somewhat of a surprise, however, considering Oracle holds a minority stake in VOD competitor nCUBE Corp. Oracle chairman Larry Ellison is the majority owner of closely held nCUBE.

nCUBE President and CEO Michael Pohl questioned the timing of Concurrent's investment in Thirdspace, noting slowness in Europe's DSL market.

"We provision the largest DSL deployments in the world and the (DSL) market is dormant at this point," Pohl said. "It's good to know that they (Concurrent) have so much cash to invest in projects like these."

nCUBE's equipment and software is used today for a number of DSL-based VOD deployments, including China Telcom's, which plans to serve 1.2 million subs, Korea's It's TV, which has put in an order for 96 nCUBE servers, and the U.K.'s Kingston Communications.

nCUBE does have an official business relationship with Thirdspace that dates back to October 2000, when Oracle transferred its iTV division to nCUBE and Thirdspace in exchange for minority equity stakes in each company.