Within a week, Akamai took two steps to improve its position in the carrier content delivery network (CDN) market.
First it announced plans to acquire Verivue, which sells licensed and managed CDN solutions that complement Akamai’s portfolio. Second it unveiled a strategic alliance with Orange to provide CDN services to business customers.
Both actions build on Akamai’s Aura Network Solutions, announced in February 2012, to address carriers’ CDN requirements
If the all-cash deal for Verivue closes, its operations will accelerate Akamai’s entry into the licensed CDN market and augment the sales and engineering capabilities needed to extend its reach to cablecos and first- and second-tier wireless and wireline carriers.
Meanwhile, the partnership agreement with Orange will help validate Akamai’s approach to providing a carrier CDN solution that includes licensed software and managed services.
The explosion of over-the-top (OTT) applications is driving operators’ investments in both retail and wholesale CDNs to manage quality of service, both of their own pure-play OTT services and hybrid linear and web entertainment services. These investments also enable delivery of Hulu-style services to subscriber households.
Operators’ investment in their own CDNs, rather than leaving the door open for pure-play CDNs such as Akamai or Limelight, fundamentally changes this market. Akamai’s challenge to date has been that, despite its unquestioned engineering competence, its wholesale sales channel has hampered its ambition to move to a managed service model.