According to a release this morning, Akamai (NASDAQ:AKAM, news, filings) has agreed to purchase Verivue in an all cash transaction. The move is clearly intended to help the dominant CDN provider improve its licensed solutions for network operators.
Verivue offers both transparent caching and licensed CDN solutions specifically to various classes of network operators. They have had some success apparently, although I haven’t followed them directly. A few weeks ago they branched out into cloud-based storage as a complementary product.
Akamai has been steadily assembling a comprehensive licensed CDN offering over the past couple of years. Back in February they finally launched their Aura Network Solutions, although we haven’t heard much on that front since. Clearly they found it expedient to take the inorganic route to speed things up.
Perhaps what we are seeing here is that one size does not fit all in the CDN world. What may be the best CDN design and technology for a global platform like Akamai may not translate in a practical way in an operator network as a licensed product. Network operators have different needs, and perhaps Akamai is thinking of Verivue’s operator-focused platform as a complementary partner to its own technology rather than try to shoehorn its own global approach into something three sizes too small.
It’s an easy move to make for Akamai though, as their coffers are quite full after a very strong year of organic growth. Between cash and marketable securities, they’ve got over $1B worth of financial flexibility. Financial terms for this deal were not disclosed, which means for Akamai it will come out of petty cash.
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