According to Dan Rayburn, Tata Communications (news, filings) is about to buy out its CDN partner, BitGravity. If true, we will soon have another major international backbone with both feet fully in the content delivery business. Dan is usually right about CDN M&As, and it does have a ring of truth to it regardless. Tata invested $11.5M in BitGravity back in the Fall of 2008, thereby staking out its position alongside all the other network operators seeking a bit of CDN exposure. They have since then worked BitGravity-powered content delivery products into their portfolio, notching streaming video wins like this one.
However, the results of the partnership has apparently not been enough to raise BitGravity's mass out of the pack and into the top tier of CDNs. They've run out of runway, and takeoff was not imminent. Tata would prefer to simply bring it in house rather than find a new partner or re-integrate with an outside buyer, and frankly it's pocket change to them. But I wonder just what they will do with the asset, assuming this deal goes through. Will they then integrate it into their network fully, and leverage their Tier 1 status and peering relationships the way Level 3 has?
There's an interesting angle to this that relates to the Comcast/Level3 dispute. Comcast actually buys transit from none other than Tata Communications, and theoretically Level 3 could send some of that traffic via that route. But some say Comcast is already deliberately running that connection at full capacity, dropping packets and causing congestion in an effort to force Tata into some other peering relationship. If Tata indeed purchases BitGravity and follows the Level 3 path, the mess just might get even bigger with last mile provider Comcast embroiled in *two* disputes with international backbones that also operate CDNs. Of course, Tata doesn't have the Netflix traffic surge, but since they are already butting heads...
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