Over on Contentinople, there is speculation that Internap will exit the CDN business. The argument is basically that they have screwed it up so badly so far, they may just give up and write it off. Personally, I doubt it. The street tends to create urgency where there is none, there is no urgency for Internap to just give up and it is against human nature to do so.
I do think that Internap has to make some decisions from here, but I disagree with the analyst who said that the assets never made sense in Internap’s hands. From a strategic standpoint, a CDN product has always made sense alongside Internap’s high end blended transit and colocation. That’s why they were reselling Akamai’s services before this debacle even started – their customer base really does have interest in CDN services. What Internap has failed at (so far) is execution, not strategy. They have to convince both themselves and their customers that they know how to run a CDN, else they need to sell out to someone who can.
But the strategic fit works both ways. It may make sense for a CDN, one that wants to stay independent of the telecoms, to buy Internap. Hold on, am I insane, you ask? Well think about it for a second. Limelight already resells some IP transit, might it make sense for Limelight to combine its CDN with Internap’s high-end blended transit niche plus a colocation business that would have synergies for all those servers? There are cost savings to be had there. Yes, I do realize that Limelight probably is not in a position to pull it off right now, but I think that is the only big thing in the way of such a move. What about Akamai? If they don’t need a backbone but do need a broader portfolio to compete with one, then Internap’s customer list would not be a bad place to start.
Ah well, I doubt that will happen, but you never know. From here I think all Internap will simply try to regain its reputation, one connection at a time. What do they have to lose?
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