Twelve Months After Launching, CDN Vusion Out Of Business, More CDNs To Follow

Vusion Vusion, a peer assisted content delivery network formerly known as Jittr Networks closed their doors about eight weeks ago and is shopping their assets.(Updated: Vusion's IP has been sold to Clarendon) Officially launching on May 5th of last year, Vusion burned through around $11M in VC funding in just twleve twenty four months. Like many of the CDNs who grabbed VC money at a time when it was being given out by the handful, Vusion was doomed from the start as they had no business model. While they were quick to point out the strengths of their technology, they were too late to the game and had no plan for how their technology would translate into revenue.

Vusion joins Panther Express and Grid Networks on the list of CDNs who in the past few months, have closed up shop or been forced to have to merge with others. Add today's acquisition of CDN Velocix, and you can see that the CDN market is starting to consolidate and not in a positive light for most of the VCs involved.

Vusion isn't the only CDN on the short list of those in trouble and we'll see a few more CDNs, mostly newer ones launched in the past twelve months, go under before the year is up.

Updated: Vusion's 14 paying customers were transitioned over to Ooyala.

Related Posts:

- Alcatel-Lucent Acquires CDN Technology Provider Velocix

- No Major Consolidation In The CDN Market Anytime Soon

- Three More CDNs Launch, Market Too Crowded

- What's The Barrier To Entry In The CDN Business? A Few Hundred Million

- New CDN Conviva Gets $20 Million In Funding: VCs, Stop The Insanity!

  • http://www.contentinople.com/ Ryan Lawler

    “In the next 12-18 months, I expect we’ll see almost no consolidation at all.” — Dan Rayburn, June 6, 2008
    http://blog.streamingmedia.com/the_business_of_online_vi/2008/06/no-consolidatio.html

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

    Ryan, if you have some thoughts on this, happy to hear them. But taking my quote out of context and putting that as your comment is not accurate. You neglect to mention that the title of my post this comment is from is entitled “No Major Consolidation In The CDN Market Anytime Soon”.
    If you think companies going out of business, being sold for pennies on the dollar or having to merge with other CDNs because they are out of cash is considered “major consolidation”, then we’re not going to agree on what the phrase means.
    And as I say in many different places and in many different ways in the same post, “The problem is, right now, very few CDNs have enough revenue to make them worth anything.” Which is proven by the fact they are going under or being acquired for far less than they raised.

  • http://www.buydrm.com Christopher Levy

    Death by dismemberment is not consolidation. Vusion is/was/will forever be a lost company. Today I received an email from eFax trying to sell me Webinar HD using Vusion. I wonder if they vetted this technology or not?

  • http://www.buydrm.com Christopher Levy

    Death by dismemberment is not consolidation. Vusion is/was/will forever be a lost company. Today I received an email from eFax trying to sell me Webinar HD using Vusion. I wonder if they vetted this technology or not?

  • padmedamo

    Dan, whether you see this as meaningful consolidation or not (from my perspective Vusion isn‘t and Velocix is) the point is that we are seeing battle lines increasingly drawn between existing, largely incumbent specialist managed service providers (or principally Akamai) and Service Providers or the Vendors who support Service Providers. Ok, in some cases large SPs are buying (Level3) and in some reselling (e.g. DT in Europe) but others are building, whether with smaller independants (Velocix/Verizon) or with strategic suppliers (e.g. Cisco, and now Alcatel-Lucent.)
    I’d argue that smaller players in CDN will remain niche, get snapped up or die. The likes of Akamai aren’t worried by Vusion but they are/should be worried by the muscle of Cisco, the pricing of Huawei etc. I’m seeing them react already.

  • http://www.ramprate.com Steve Lerner

    My last comment wound up under the wrong post:
    Looks like its time to update the CDN Graveyard! Maybe even make CDN Graveyard 2.0! The CDN Graveyard was a list I made in 2003 of dead or essentially dead CDNs.
    Great hits like Microcast, Adero, Axient, and Intel Media Services dotted that list…
    Now, 6 years later, looking forward to an upswing in the graveyard business!
    It is very sad to see capital deployed poorly- the world is in need of innovation, not venture capital gambling…
    The only pattern I’ve seen for CDNs that succeed is a simple one: those that improve peformance last and/or are profitable or profitably equitized, those who don’t affect performance vanish…

  • Annonomous

    Nothing is funnier then all the ridiculous Harvard edu wasted VC’s who ALL claime that “they are different from the others. We think out of the box”. “Our unique criteria” or a favorite “our team is dedicated to uniquely working with our portfolio companys”.
    Um yea right. This while you pile investor money into a sector not because you “believe in the company and what they are doing” but because you don’t want to miss out on something (sheep) and think you are going to make a quick buck.
    Don’t get me wrong, nothing wrong with a quick buck but as we are seeing there really aren’t that many to go around.

  • http://www.contentinople.com/ Ryan Lawler

    Dan – A year ago you said there would be no consolidation at all, now you’re saying that more companies are going out of business or being scooped up for pennies on the dollar. Whatever you want to call it, the 40 or 50 or so CDNs that we both cover are starting to disappear. Whether or not that’s because they’ve run out of runway seems besides the point. If you want to argue that “major consolidation” means successful businesses tying up to become more successful businesses, that’s fine. It just seems like arguing semantics to me, especially when you have companies like Panther and CDNetworks merging, Velocix being bought out, etc.

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

    @padmedamo – I agree with you. We have been seeing for some time now the line drawn between stand alone CDN providers and telcos and carriers who are offering CDN services either to content owners, or service providers as part of a bigger overall strategy. If you go to cdnlist.com you can see I break out the pure-play CDN vendors from the carriers and telcos.
    You say, “I’d argue that smaller players in CDN will remain niche, get snapped up or die.” No disagreement from me there, those are the only three things that can happen to any company. They survive, get acquired or go under.

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

    @ Ryan Lawler – As someone said above, “Death by dismemberment is not consolidation.” At least not to me anyway. And as I have said countless times before on the blog, in presentations and in videos:
    “In 2000 we had almost 60 CDN vendors. In 2002 we had about a dozen, in 2004 we had six. We’ve seen this before. We are already starting to see some go under.”

  • http://www.ramprate.com Steve Lerner

    Ryan,
    When Dan says consolidation he means Akamai buying Limelight, like Akamai bought Speedera, Netli, and Intervu.
    One major CDN buying another, and integrating its customers, assets, and IP.
    He predicts that this won’t happen.
    Its far different from one company buying the corpse of another to pick over it… as is what is happening in many of these recent press releases.
    Some of us have been around for a while and seen the rise, fall, rise, fall, and rise of CDNs…

  • Kevin Mazier

    I think it’s funny when Ryan says “the 40 or 50 or so CDNs that we both cover” yet the Contentinople website only list 16 CDNs in their so called “guide” on the CDN market, which is still giving out data from 2007.
    Dan, I for one appreciate how professional you reply to comments that are clearly written with the intent to try and get you into some kind of verbal argument. Those types of comments by others are seeing for exactly what they are.

  • http://www.ramprate.com Steve Lerner

    I’m just glad Ibeam isn’t around anymore. There was no greater fraud in the history of CDNs. They claimed to delivery content from “a satellite” to “edge servers” but any traceroute of anything from them always went to one of two datacenters…