In what has easily been the most surprising result from the reader polls I have run on this site, when asked ‘Which IP network will enter the CDN market next’, the answer “Global Crossing” has run a strong second place amongst readers of this blog. The leader, Verizon, was a no-brainer of course. No other company got more than two votes, including my own pick of BT.
But it does make some sense – after all Global Crossing is a tier-1 network and they have been re-entering the datacenter space lately, they would in fact be able to take advantage of that to reduce costs. The other two networks entering the CDN space lately have been Tata and Reliance, both of whom have a strong tilt to the international market – one could argue that if CDN is interesting to them then it is probably also interesting to Global Crossing. But the Indian carriers have deep pockets, whereas Global Crossing’s means are more modest right now. So who would they target, if they wanted to enter?
Maybe they will go after a small foothold like Panther Express or Mirror Image. Well, there’s always Limelight I guess, but that’s a bit large and it is still embroiled in various patent suits that nobody really wants to step into. And that brings up another point, how does anyone other than Akamai, Level 3, and AT&T handle the patent issue going forward? Reliance is just reselling Internap, but Tata is running its own CDN out there without much of a patent umbrella that I know of. Unlike Verizon, which is surely sitting on a pile of patents for defense if they jump in, Global Crossing wouldn’t seem to have much coverage. I know, nobody gets sued in CDN unless they become a threat, but who would enter the sector without intending to be a threat?
Besides, I think Global Crossing’s first order of business has to be metro fiber in the USA so that is where their M&A dollars will be focused, assuming they have any. But at some point they may in fact need some sort of CDN foothold, so perhaps the most likely result is a partnership/reselling arrangement. Actually, I could see a Global Crossing/Limelight partnership deal pretty easily with little downside for either party, so that’s now my guess. Unless Verizon moves first of course.
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