Bell Canada (NYSE:BCE, news, filings) today announced the Bell Content Delivery Network, making good on Dan Rayburn's prediction that another carrier would enter the CDN market. But Bell is not flying solo on this one, they are partnering with Limelight Networks (NASDAQ:LLNW, news, filings) to get it done. Limelight servers will live and operate within Bell's data centers and IP network, and the new CDN will act as its Canadian arm expanding its reach in that market.
For Bell Canada, this kind of arrangement makes a great deal of sense. Canadian content customers generally get short shrift, as few standalone CDNs will ever spend much effort focusing on the Canadian market. However, on its own Bell would not be able to tackle the international CDN market since its assets are very regionally focused. By partnering with Limelight like this, they don't expose themselves much to the risks of a crowded sector yet will be able to bring content closer to their end users than they could have via any resale arrangement. For its part, Limelight gets an ally in its fight to match the network breadth of Akamai (NASDAQ:AKAM, news, filings), not to mention the revenues that will result.
I wonder if this deal might serve as a model for other regional telecoms in smaller markets. Such companies surely want a piece of the CDN pie as much as networks with global scale do, however resale agreements don't take advantage of their local infrastructure and hence don't give them any competitive advantage to work with. And Limelight, despite the good year they have been having competitively, is still facing down Goliath and can use all the help it can get.
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