Content Delivery Deals Are On Upswing

Welcome Guest. | Log In| Register | Membership Benefits

May 25, 2000 (10:27 AM EDT)

By Kate Gerwig,

Content delivery providers keep on delivering, finessing their services and partnering with other companies to encourage more ISPs and content providers to embrace their business model.

Deals between providers have been piling up in the last few weeks. Digital Island (stock: ISLD) formalized and named its alliance with Sun Microsystems (stock: SUNW) and Inktomi (stock: INKT) to expand its Footprint delivery service. Cidera (formerly SkyCache) said it will team up with Akamai Technologies (stock: AKAM) to deliver streaming media via satellite to Akamai's content servers to speed delivery of broadband content. Meanwhile, Akamai added Cable & Wireless North America (stock: CWP) to its roster of service provider customers using its edge servers.

The deals are no surprise to analysts, who said content providers, content delivery companies, and ISPs will form new alliances to deliver content more quickly and with less backbone strain. Boston-based Yankee Group predicts content delivery service providers and hosting companies will bring in $1.4 billion in revenue from content delivery services in the United States by 2003. That's a climb from the estimated $125 million by the end of the year.

The Digital Island, Sun, and Inktomi partnership unveiled lastDecember combines Sun servers, Inktomi caching services, and Digital Island's content delivery service. Digital Island's stock price soared as a result. The "NextEdge" program is the new and formalized name of the alliance program, which will increase the number of content delivery servers located on service providers' networks around the world, from 1,300 to 6,200 by 2003. To make those numbers, NextEdge needs to add 250 to 500 ISPs to the 130 ISP networks deploying Footprint. The goal for the service is to be in 350 different cities, with 250 of those outside of the United States, Digital Island president Leo Spiegel said Tuesday.

To lure the next generation of ISPs into the NextEdge family, the companies will install Footprint servers for free within the networks of service providers participating in the program. The companies have a huge educational undertaking to make ISPs understand why content delivery services are good for ISPs and their customers, Spiegel said.

The program targets ISPs and broadband providers that want to serve popular Web content more quickly by serving it from caching servers closer to the subscriber -- ideally from a server on their own network, which avoids Internet bottlenecks. Among the ISPs and broadband providers already signed on to Digital Island's NextEdge program are America Online (stock: AOL), NorthPoint Communications (stock: NPNT), NTT Communications, Rhythms NetConnections (stock: RTHM), and Road Runner. Even though AOL had previously deployed Digital Island content delivery servers in its U.S. network, it plans to expand the service internationally, said Joe Barrett, AOL vice president of Internet operations.

In related moves, Cable & Wireless selected Akamai to deliver static Internet content, streaming media, and applications to its customers. Cable & Wireless is also getting ready to offer broadband content providers colocation space in their major global IP network sites to distribute content more efficiently.

The Cidera/Akamai partnership will deliver streaming audio, video, and live event-based content to Akamai customers via satellite. The companies signed a multiyear agreement in which Cidera will transport Akamai content to at least 1,500 ISP locations internationally.

Akamai signed another pact with Loral Cyberstar LOR, a satellite provider that will deliver its streaming content. The two companies place Loral CyberStar's broadcast satellite dishes at ISP locations that have deployed Akamai's Web servers.