As Expected, Tata Is Buying BitGravity

January 12th, 2011 by · Leave a Comment

So, it's official now, Tata Communications (news, filings) has agreed to purchase BitGravity.  While financial terms were not disclosed, Dan Rayburn pegs the deal at about $35M.  If true, then since $11.5M bought them about 15% of the company back in 2008, there wasn't much of a premium here.  Tata had partnered with the company to power its own CDN services, and they will now take all of that technology in-house. 

So we now have another Tier 1 network operator that has decided to jump all the way into the CDN pool.  Tata has found some traction in the CDN space, mostly with international clients - which makes sense given the focus of their network assets.  Once they close the acquisition, the question will be just how aggressive Tata will be in the CDN space.  Did they buy BitGravity because they simply didn't want it in other hands or worse, or because they are ready to put real muscle behind it?

As I mentioned before, it will be interesting to see how this move by Tata affects its peering/transit relationships with last mile operators in light of the Comcast/Level3 dispute.  BitGravity's traffic is probably not large enough to tip the traffic ratios much immediately, whether that should matter or not.  But their focus was always on video delivery, so it definitely won't be symmetrical.

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Categories: Content Distribution · Mergers and Acquisitions

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