Voxel, the managed hosting provider, has built its own cloud computing product called SilverLining that will compete with Amazon’s (s AMZN) Elastic Compute Cloud and Rackspace’s (s RAX) CloudServers products. Thanks to its managed hosting business, Voxel plans to offer the same hybrid strategy that both Rackspace and ServePath offer, which combines dedicated servers with cloud computing for spikes in traffic or one-off projects. Read More about Voxel Adds Cloud Computing With SilverLining
Today Amazon Web Services launched the beta version of its content delivery network service called CloudFront. This is a good move for Amazon, and something that may put the hurt on fellow CDNs such as Limelight and Akamai.
Hosting company, turned cloud computing operator Rackspace Hosting (s RAX) said today it will buy startups Slicehost and Jungle Disk to boost its Mosso cloud offerings, and step up its competition with Amazon’s Web Services.
Limelight may soon be out of the frying pan and into the fire. Katherine Egbert, an analyst with the investment bank Jefferies, issued a report today saying she thought a federal judge would decide quickly and in favor of Limelight with regards to a patent infringement suit filed against the content delivery network by rival Akamai.
But Egbert thinks that even if Limelight wins, a buyer will swoop in to snap it up. Unfortunately she thinks many on her list of buyers, which includes AT&T, Level 3 and Akamai, are likely to move Limelight’s customers over to their networks and shut Limelight’s down.
Four months ago a jury in the U.S. District Court of Massachusetts awarded Akamai $45.5 million after it found Limelight guilty of infringement. Yesterday evening a federal court judge gave Limelight Networks a little breathing room in the patent fight by holding off on a permanent injunction that could shut down half of Limelight’s business. The judge is waiting to decide on the rest of several motions before her in the case, and said a favorable decision for Akamai in the other motions might lead to a permanent injunction.
Typically the process of hearing and deciding motions can take a few days to a couple of months, so shareholders are probably hoping Egbert’s conclusions are correct, especially the ones that see Limelight selling for $6 to $7 per share. That’s a far cry from the stock’s $23.82 high last summer, but it’s about where it was trading right before it was socked with the $45.5 million judgment.
Today, telco gear maker Dilithium Networks launched a software product for carriers, content publishers and content delivery networks that can handle all of the transcoding necessary to take content formatted for one screen and move it to another in real time. The Dilithium Content Adapter is the first software product from the seven-year-old telecommunications gear maker. The company has focused on 3G video since its inception, and Dilithium says the product is already deployed with some operators and CDNs.
But Dilthium’s not alone in its focus on delivering faster video to mobile devices. In a few months, Limelight Networks will launch a mobile CDN product for its customers, and Dave Hatfield, an SVP of marketing sales at Limelight, says customers are testing such a product now. While it’s not a huge focus at Limelight right now, he says phones like the iPhone have changed the potential size of the market by making it easier for consumers to get mobile video — and that could spur market growth.
Like a ballet, a patent lawsuit has dozens of carefully orchestrated steps, and today’s judgment against Limelight Networks marks the beginning of the exciting part of the show, which could drag on for years, or get cut short by a settlement. Earlier today a jury in the U.S. District Court of Massachusetts found Limelight guilty of infringing four of claims in one of Akamai’s patents, and awarded the wronged content delivery network $45.5 million in damages.
Akamai also said it would seek an injunction to stop Limelight from continuing to sell infringing services. Limelight issued a release saying it was disappointed and would appeal the verdict, which means a trip to Washington’s U.S. Court of Appeals. For a program guide to how this may play out, see our previous coverage of the Verizon/Vonage patent lawsuit.
After posting a larger-than-expected loss for its most recent quarter, Limelight says the current quarter won’t be much better. Why? It’s those pesky picketing writers, who are costing Limelight $1 million this quarter in lost business. And they’ll cost Limelight millions more this year, even though they went back to work last week.
Limelight, which like Akamai makes money by shuttling high-bandwidth digital content around the Internet, said big customers are trimming their online spending until the release of new programming returns to normal.
Content delivery network Limelight Networks’ shares surged nearly 20 percent Friday after saying it expects fourth-quarter revenue to come in at the high end of its previous guidance. The bad news is that the sales are estimated to range from $29.3 million to $30 million, essentially flat compared with the previous quarter.
Given that there’s a price war among the big CDNs, a war that last fall prompted Level 3 to announce it would take its CDN prices to about half the going rate, Limelight’s (LLNW) stable sales may be largely due to deep discounting. As Limelight spends about 60 cents on every $1 it earns just to provide service, whereas Akamai spends about 30 cents, I’m not sure how low Limelight can go. Or for how long.
William Roper Jr., the new chief executive officer of Mountain View, Calif.-based VeriSign, wants to streamline the company by selling off non-core businesses. His plan — sell or shut down, something I first reported back in August. At the time, VeriSign had no plans to sell off its content delivery network business, but it seems like things have changed.
Roper Jr. recently outlined his plan for Wall Street analysts and investors. His presentation prompted Dan Rayburn to do some digging and report that VeriSign’s Kontiki CDN business was up for sale as well, with Limelight Networks as one of the potential acquirers.
While VeriSign stated that it would review its content delivery offering over the next six months and decide whether or not to keep it, the CDN business is already being shopped around to other CDNs and content companies who many want to own their own network.