Possibly the most surprising CDN acquisition last year was the purchase of Velocix by Alcatel-Lucent (NYSE:ALU, news, filings). Just what exactly the telecommunications equipment giant intended to do in the CDN space was unclear. As interesting as content delivery is right now, revenue-wise the whole sector can fit in their back pocket and still leave room for a cell phone. Today though, Alcatel-Lucent announced its Multimedia Solutions initiative, the largest part of which was of course built on Velocix.
So what has become of Velocix? Network appliances that a service provider can buy and install in its own network that will give them their own dedicated CDN infrastructure, caching content closer to their own subscribers. The idea is to offer service providers the chance to be a CDN without having to develop all the processes and capabilities internally that standalone CDNs do. In other words, they hope to let service providers deploy and operate their CDN the same way that they deploy and operate their networks right now. Of course, that's what Velocix was doing before, this is just a different way to say it. Or perhaps it just sounds different because it's Alcatel-Lucent saying it.
What this doesn't do is enable providers to directly enter the CDN space in the sense of competing with Akamai and Limelight. It's much more local, geared toward just their own subscribers and with specialized features rather more comprehensive general ones with managed services tacked on. But that specialization still puzzles me, I don't see how an industry where every service provider has its own free-standing CDN makes much sense. Content providers can't realistically deal with them all. Unless of course the myriad of free standing CDNs can talk to each other and cooperate automatically somehow parallel to the way the rest of the internet does through transit and peering connections. That's where I thought Velocix might be heading last year, and there are hints of such cooperation between service providers in Alcatel-Lucent's press release.
For now though, I'm just curious who will be buying the gear and what they will be doing with it.
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