Light Reading

Verizon Scoops Up CDN Provider

Alan Breznick
12/9/2013
50%
50%

Racing to boost its competitive position in the emerging TV Everywhere market, Verizon Communications has struck again, making a deal to acquire another cloud-based video specialist.

Verizon Communications Inc. (NYSE: VZ) announced Monday that it will buy EdgeCast Networks Inc. , a privately owned content delivery network (CDN) provider. One of the fastest growing Internet firms, seven-year-old EdgeCast boasts more than 6,000 customers, including such large North American and European telcos as BT Group plc (NYSE: BT; London: BTA), Deutsche Telekom AG (NYSE: DT), and Telus Corp. (NYSE: TU; Toronto: T).

No terms of the deals were disclosed. But TechCrunch reported Sunday that Verizon will shell out more than $350 million for EdgeCast. Verizon said it expects to close the deal early next year.

The EdgeCast deal comes less than a month after Verizon scooped up uplink for an undisclosed sum. That three-year-old startup, which powers video streaming for the Watch ABC and Watch Disney TV Everywhere apps, focuses on streamlining the uploading and encoding of video streams for TV Everywhere services. (See Verizon Beefs Up TVE Unit.)

As with uplink, Verizon plans to integrate EdgeCast into its cloud-based video services unit, Verizon Digital Media Services . Specifically, the telco said Verizon DMS "will integrate EdgeCast's complementary capabilities to further improve and increase its ability to meet the exponential growth in online digital media content," as well as "broaden its portfolio of site acceleration services for digital enterprises."

EdgeCast, which has raised about $74 million in private funding since its 2006 launch, has made a name for itself in the fiercely contested CDN space despite competing against much bigger, more established companies. Its rivals include Akamai Technologies Inc. (Nasdaq: AKAM), Limelight Networks Inc. (Nasdaq: LLNW), Level 3 Communications Inc. (NYSE: LVLT), and Alcatel-Lucent (NYSE: ALU).

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(9)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
albreznick
50%
50%
albreznick,
User Rank: Blogger
12/10/2013 | 9:26:36 PM
Re: Verizon
So do you think yet another acquisition may be needed for Verizon? Or do they now have what they need to do whatever they're going to do? The plot thickens.
kk-1
50%
50%
kk-1,
User Rank: Light Beer
12/10/2013 | 2:38:24 AM
Re: Verizon
$70M+ in financing means a post-money valuation of probably around $125M to $150M. Which means it's a 2X or so return for the VCs.

That begs the question - why did Edgecast sell for such a low multiple? Obviously, they wanted an exit and a better one didn't show up - which means they were likely not doing too well, and VDMS won't necessarily get lots of new business from this acquisition.
^ip4g^
50%
50%
^ip4g^,
User Rank: Lightning
12/10/2013 | 2:13:55 AM
Re: Verizon
.. the same way BitGravity is with Tata Communications. Do they get really forged, going forward ?
David Dines
50%
50%
David Dines,
User Rank: Blogger
12/9/2013 | 7:13:39 PM
Re: Verizon
Good question Alan, I would not try to guess what, if anything, is the end game for Verizon.  While they have been at this for a while, starting with Velocix, it is hard to know how much they dedicatd to making it happen. I would hypothesize that they tried to make it work first with a homegrown software, then they tried Velocix, then gave up and bought Edgecast.
albreznick
50%
50%
albreznick,
User Rank: Blogger
12/9/2013 | 6:49:26 PM
Re: Verizon
Very interesting indeed. I wonder what Verizon is up to here too. If they were serious about CDNs, why didn't they start earlier and go bigger? Or do they have something else up their sleeves?
David Dines
50%
50%
David Dines,
User Rank: Blogger
12/9/2013 | 3:44:20 PM
Re: Verizon
Very interesting development. I have noticed that the telcos in the past seem to consistently underestimate what it takes to make a global CDN network highly successful.  At least now Verizon will have a knowledgable sales and service staff. I have a wait and see attitude as to whether they will be able to increase market share - if the Terremark acquisition is any indicator, I would not expect great things out of this.
bosco_pcs
50%
50%
bosco_pcs,
User Rank: Light Sabre
12/9/2013 | 3:00:13 PM
Re: Verizon
Dan: 

if memory serves, folks like VZ and T would show their CDN ambition causing some discomfort to folks like AKAM and LVLT from time to time. Then the latter would respond saying they are more than just commoditized CDN providers

I have no clue abot EdgeCast but if VZ's hosting ACA is any guides, perhaps people should wait and see how the regular CDN gang turn out in the next few Qs before they draw any conclusions
wanlord
50%
50%
wanlord,
User Rank: Light Sabre
12/9/2013 | 1:32:31 PM
Re: Verizon
I think it took someone too long and too much money to realize it wasn't worth trying to build it in house...
DOShea
50%
50%
DOShea,
User Rank: Blogger
12/9/2013 | 12:27:25 PM
Verizon
Seems like Verizon is taking a much different direction than AT&T, which has been working closely with Akamai rather than trying to buy up CDNs.
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Hosting in Ireland, Past & Present

2|10|16   |   16:07   |   (0) comments


Garry Connolly, president of Host in Ireland, presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
Women in Comms Introduction Videos
What's Hot in Mobile Commerce?

2|10|16   |   12:18   |   (1) comment


Claire Maslen, financial services relationship manager at the GSMA, talks about the development of the digital commerce sector and the types of relationships that mobile operators are developing to further their m-commerce strategies.
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (1) comment


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
Cincinnati Bell Joins Weight Watchers Club
Alan Breznick, Cable/Video Practice Leader, 2/5/2016
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Animals with Phones
Retro Is the Way to Be Click Here
Some animals are too cute for smartphones.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.