Content Delivery Services Cos. Go To Battle

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December 22, 1999 (12:00 AM EST)

The content delivery services market is spawning a flurry of activity, including multiple partnerships and product and service announcements, as companies jockey for position in this fast-growing market.

"It seems like the battle lines are being drawn," said Yankee Group analyst Alex Benik, who authored a report on the market published this week.

Akamai Technologies, which Benik said is the company to beat in this space, this week unveiled a partnership with cable online service provider Road Runner. This came fast on the heels of a partnership with CMGI for developing and selling applications for speeding up Web content delivery services.

Also this week, Hewlett-Packard jumped into the fray, saying it will invest $32 million in Xcelera.com to provide high-speed Internet content delivery services.

Earlier this month, Sun Microsystems and Internet software company Inktomi took minority stakes in Web hosting company Digital Island to expand its content delivery network. Digital Island is already in the process of merging with Sandpiper Networks to integrate network, hosting, and content delivery services.

"Without a fast, reliable network infrastructure that can keep the [online] consumer from moving on [to another e-commerce site] within seven seconds, we have only an industry that will be a flash in the pan," said Digital Island CEO Ruann Ernst at the time of the alliance announcement.

The market for content delivery service providers will grow to $875 million by 2003, according to the Yankee Group report.