Report: AT&T getting ready for head-to-head fight with Akamai

Can AT&T take away some of Akamai's value add business? A blog post from an analyst today said that the telco is in the process of integrating Cotendo's app acceleration and dynamic site acceleration with its network, posting the first challenge to what has been a business of one-Akamai--to this point.

In the post from Dan Rayburn, he said AT&T had told him they were set to go after Akamai in that market, adding that they could charge 50 percent of the rate Akamai currently gets for the services and be "extremely happy" with the margin.

Privately held Cotendo launched in March of last year and in May closed a $12 million Series C funding round that it said would be used to scale its domestic and international market expansion, as well as accelerate the development of innovative technology. The post said the company already has signed up 200 customers for its dynamic site acceleration and application acceleration services including Facebook,, and Digg. AT&T already has been able to use Cotendo's capabilities, which it signed a non-exclusive deal for in July, to attract--and win--business.

According to Jim Davis, Senior Analyst with Tier1 Research, "Dynamic site and application acceleration services such as those offered by Cotendo will be a key growth driver for the CDN market through 2012 when it is expected to reach the $2 billion mark. Network performance will become increasingly important as enterprises continue to ramp up adoption of cloud-based applications during that time frame."

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