Is Internap's CDN Making a Comeback?

September 16th, 2008 by · 4 Comments

Internap has announced a flurry of small CDN deals this month, is this a recovery?  First there was Million Dollar Round Table after Labor Day, then Synacor last week , and today we have TV Worldwide's FedEdTV.com.  None of these deals are huge obviously, but Internap's niche has always been the small to mid-sized sites that need lots of reliable bandwidth but lack the resources or desire to manage it themselves.  In other words, small or not they're Internap's kind of customers.

Internap's CDN has had a really bad time over the last 12 months of course.  Last year in the second half is when the company began to mismanage the integration of the asset after the VitalStream acquisition, to the extent that they didn't even know their customers were demanding credits and heading for the doors.  From then on, it was downhill as the effects did damage to the company's earnings and reputation.  It got to the point that some expected them to write off the CDN business altogether.

Of course a few PRs don't mean the sun has come out permanently, we won't know that until we see their revenues start to grow again in their next few earnings reports.  After all, PRs do come from the PR department.  But it does say that Internap doesn't seem ready to take its ball and go home, they're going to try to claw their way back into the CDN game.

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Categories: Content Distribution · Datacenter

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4 Comments So Far


  • David Sanders says:

    It’s far too late for INAP on CDN. Look for their Q3 CDN rev’s to be flat or less that Q2. Considering the price they paid ~ $217M, this is a disaster. It has become so onerous, the vultures are swirling now because of the mismanagement in integration and CDN Engineering. It’s a sad tale of a company that lost it’s way. The idea of CDN was fine but the rushed purchase of VSTH and the mis-managed integration were pure hubris and the blame lies squarely w/ the CEO and upper management.

  • Rob Powell says:

    It’s certainly too late to justify the original purchase price, that train left the station long ago. But at some point, the trajectory changes and we must look to the future and at whether the company can grow from here. I think they can, but they will have to prove it the hard way through the winter (both the one in the financial markets and economy and the one where the weather gets cold).

  • David Sanders says:

    Well, one a buy vs. build decision, one of the key reasons you buy is to gain a competitive mover advantage in the marketplace. Not only did Internap not avail themselves of that, they lost position in terms of the original asset value with all the defection.

    When they made the decision to re-engineer the network, their brand took an awful hit. In my opinion, one – given the richness in the marketplace with provider choices – they cannot recover from. Their name is mud. The wins, if you read the PR, are for bundled solutions. INAP may serve CDN but it could be managed servers – they have that in CDN – or it could be negligible compared to colo and IP revenue.

    Again, my opinion but looking at the numbers and CDN growth in 2008 compared to AKAM and LLNW, INAP is not even remotely a player. Add CDNetworks, LVLT and start-ups now in the market and they have little to no chance.

  • David Sanders says:

    Well, one a buy vs. build decision, one of the key reasons you buy is to gain a competitive mover advantage in the marketplace. Not only did Internap not avail themselves of that, they lost position in terms of the original asset value with all the defection.

    When they made the decision to re-engineer the network, their brand took an awful hit. In my opinion, one – given the richness in the marketplace with provider choices – they cannot recover from. Their name is mud. The wins, if you read the PR, are for bundled solutions. INAP may serve CDN but it could be managed servers – they have that in CDN – or it could be negligible compared to colo and IP revenue.

    Again, my opinion but looking at the numbers and CDN growth in 2008 compared to AKAM and LLNW, INAP is not even remotely a player. Add CDNetworks, LVLT and start-ups now in the market and they have little to no chance.

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