NaviSite To Resell CDN Services From EdgeCast

Hot on the heels of EdgeCast signing up Deutsche Telekom to resell their CDN services, EdgeCast announced another partnership this morning with managed hosting provider NaviSite.

This is a natural fit between the two companies and one of those deals where it doesn't look good just on paper. While NaviSite currently has some CDN service of their own, the company made a strategic decision almost two years ago not to invest any more money into their CDN business and to not come into the crowded CDN market. Probably a smart move on their part to instead focus on services outside of content delivery like managed hosting and application services.

Reselling the EgdeCast CDN will let NaviSite transition customers off of their infrastructure over time and also give them more services to sell since EdgeCast's CDN product has more functionality for things like streaming and support for Flash. This is also a good tie up between the two companies, as NaviSite already knows what CDN is, has the technical depth to understand the technology and should be fairly easy for their sales force to sell the offering. While NaviSite's sales force will now have the ability to sell more advanced CDN services, they are not looking to compete with the pureplay CDNs in the market and intend to focus on selling CDN to their current crop of customers.

EdgeCast says they have close to 25 resellers now for their CDN
services and have even more in the pipeline. I like the way EdgeCast is
using other companies to act as their sales force and letting the
channel of resellers push customers onto their network. It's a smart
move for EdgeCast as they have managed to sign up over 300 customers to
date, while only having raised a very small amount of capital. Since
launching, EdgeCast has stayed very focused on going after medium sized
customer and is not getting caught up in trying to focus on the really
large content owners that all the other major CDNs seem to be fighting
over.

  • http://www.telecomramblings.com Rob Powell

    What sort of revenue level is Edgecast at. Are they poised to break into the top 5?

  • Rob

    Ah, hem, isn’t Navisite supposed to be a CDN already? With their own network?
    http://www.navisite.com/content-delivery/
    So now their sales reps are going to start pushing EdgeCast instead of their own solutions?

  • http://www.BusinessOfVideo.com Dan Rayburn

    Hey Rob, no, EdgeCast would not be anywhere near the top five. Akamai, Limelight, CDNetworks, Level 3, Internap, in that order, would be the top 5 in terms of video CDN revenue for 2008. In 2009, folks like HighWinds and ChinaCache could also place in the top five around Internap’s spot. EdgeCast could potentially do $20 million in 09, but that would require some serious growth, nearly 3x around what they did in 08.

  • Ron L

    Edgecast to sell company. If you look at the owner’s history all they do is buy and sell companies. After 3 years they are out. And this is their 3rd year in business. If I had an account with them I’d worry about who I’d end up with. BTW, Rob you are pretty accurate with your numbers Edgecast is no where near 20Mill probably more like 3.

  • http://www.BusinessOfVideo.com Dan Rayburn

    Ron, EdgeCast launched in August of 07, so they have been in business about a year and a half. This is not their third year in business.
    I do agree that they will be acquired, but not because of your reasoning and you make it sound like being acquired is a bad thing. EdgeCast will be acquired because the telcos who are using them like GlobalCrossing and Deutsche Telekom rave about how good they are, how well their network operates and how much they like working with them. Any telco could take EdgeCast out of the market without even blinking as the deal size would be very small, yet profitable to EdgeCast.
    Why would anyone who has an account with EdgeCast be worried? They are not short on money, are not trying to do crazy expansion, don’t want to be the size of Limelight and are very focused on the business they go after. Not to mention, I have yet to hear from a customer who didn’t like their service.
    There is no reason for any customer who is on EdgeCast to worry. You give no reasoning or logic behind why the opposite would be true.