Verivue Inc. has acquired CDN technology company CoBlitz in a deal that gives Verivue a turnkey CDN infrastructure solution for service providers seeking to deploy their own management, control and delivery capabilities in support of rich media initiatives.
Terms of the deal, which was completed about two weeks ago, were not disclosed. Verivue CEO Jim Dolce told FierceIPTV that Verivue, which has about 100 employees based in Westford, Mass., and CoBlitz, which has about 15 employees and is based in Princeton, N.J., will continue to operate in both locations. (See an in-depth interview with Dolce here.) He said the CoBlitz management team, including co-founders Larry Peterson and Vivek Pai, will join Verivue. "Their practical knowledge of content delivery networks will greatly benefit our service provider customers as they build out their CDN offerings."
The deal, in essence, will allow Verivue to compete head-to-head with Cisco and Alcatel-Lucent for business from Tier 1 telcos looking to making a strategic push into the CDN market to optimize their internet traffic volume and lower the cost of network infrastructure. He said Verivue saw in CoBlitz an opportunity to take a market-leading position rather than wait for in-house development of a new product.
Online video traffic is expanding at breakneck speed as popular services like Netflix and Hulu demand growing amounts of bandwidth; with new initiatives from Apple and Google on the horizon, Tier 1 telcos are looking for ways to alleviate the problems the massive amounts of traffic pose for them.
"Video is very cacheable," Dolce said. "A CDN basically reduces the network traffic load by replicating popular content onto strategically placed edge servers and then redirecting the client to the closest edge server. That frees up backbone capacity and also addresses performance. In the end, it also lowers network costs overall."
Infonetics Analyst Jeff Heynen said the obvious trend is for operators to start building out their own CDNs. "They're coming to realize that rather than view over-the-top traffic and http streaming as their enemy, they might as well build something into their service offerings and bill for it," he said."By setting up a CDN they can interject themselves into the revenue stream. Instead of Akamai and Limelight, Comcast, AT&T and Verizon can now take some of the revenue. It also allows them to make their on-demand libraries more efficient and larger."
Heynen said Verivue's acquisition of CoBlitz gives the company a head start in the space and moves it into the realm of Cisco and Alca-Lu.
"I think the most interesting part of this is just how much the operators themselves are investing in building out their own CDNs," Heynen said."Time Warner is working on one, Comcast has deployed already and the telcos are in an excellent position to set up their own operations. It's just a more efficient way to get in the revenue chain."
- see this release
Verivue CEO: Telcos all look to build CDNs as video traffic surges
Verivue lands Canadian cableco Shaw as client for VOD solution