AT&T (NYSE: T) and Akamai on Thursday entered into a strategic alliance where they will jointly deliver content delivery network (CDN) services to businesses.
Leveraging the strengths of both companies in network services and CDN, this partnership makes sense on a few levels.
Although Akamai established itself in recent years as a key CDN player, it will need partners like AT&T that have a broad-reaching IP network to reach both domestic and international businesses.
Another potential benefit here is time to market. While AT&T already had its own CDN solution, the partnership with Akamai enables it to more quickly scale these capabilities than it would be able to do on its own or by purchasing another CDN company.
The two companies will offer a suite of global CDN and telecom services that they will jointly market, manage, and support. Initially focused on North America, the duo plans to take the service into the global market within the next year.
What's driving the need for CDN capabilities in the enterprise segment is that companies are using more video to communicate their message with their clientele, especially in the media and retail segments. AT&T and Akamai said their joint offering will help "simplify content distribution management and drive higher-performing end user experiences for consumers accessing content on the Internet."
To deliver the service, Akamai will deploy CDN services at the edge of AT&T's IP network and other AT&T facilities throughout the United States. Under the terms of the agreement, AT&T will also transfer its existing CDN operations and service to the Akamai platform next year. In addition, the two companies will dedicate shared resources including technical support, customer care, marketing and professional services support.
This deal comes at time when competitive shifts are taking place in the burgeoning CDN space. Last year, Akamai purchased CDN rival Cotendo following reports that both AT&T and Juniper Networks (NYSE: JNPR) had been also interested in buying the company themselves.
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