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Alliances vie for control of speedy Net market

While Internet service providers gather for an annual trade show, some of the Internet's biggest infrastructure companies are skirmishing behind the scenes to win their loyalty.

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While Internet service providers gather in San Jose, Calif., Wednesday for an annual trade show, some of the Internet's biggest infrastructure companies are skirmishing behind the scenes to win their loyalty.

A pair of alliance announcements in August set Inktomi and, to a lesser extent, Cisco Systems on a crash course with Akamai Technologies, the leader in the young "content delivery" market. Those groups have spent the last few months signing up new members and solidifying their technologies, in efforts to gain enough momentum to pull the market in their direction.

From the perspective of the ordinary Web surfer, little is likely to change one way or the other if one or the other party stakes a dominant claim on this infrastructure landscape. All of the parties involved are committed to speeding Web downloads, though each uses different flavors of hardware and proprietary technology to do so.

But the winner, if a winner emerges, stands to help shape a market that could touch most Net-connected households, potentially a hugely profitable position in the upcoming years. Estimates for the size of the content-delivery market range from about $1 billion to $6 billion over the next few years, according to analysts.

Analysts remain unconvinced that the alliance efforts will make much of a dent in the business landscape, however, even if they do manage to create a successful standards drive. That bodes well for the less aggressive Cisco group, but could raise warning flags for Inktomi's organization.

"Our perception is that (Inktomi's group) is trying to add one plus one plus one and get four," said The Yankee Group analyst Alex Benik, noting that this is the group most directly competing with Akamai. "The (Cisco-led) Content Alliance is more interesting."

Jumping into the stream
The content-delivery business has exploded in the past year, as a long list of companies have sprung up with different takes on the idea of bypassing bottlenecks in the Web's infrastructure.

Most are built on a model similar to leader Akamai's, putting servers inside Internet service provider networks as close as possible to individual Web surfers. By distributing and storing much of a Web site's content inside these servers, the companies cut much of the time taken for downloads to traverse clogged networks.

In the course of the past year, the business has also moved from a focus on strictly static content such as graphics and text to support for streaming media and some rudimentary Web applications. Akamai, for example, has streamed such events as the Emmy Awards, the MTV Video Music Awards, CNN broadcasts and political conventions, helping avoid traffic jams that hindered early streaming broadcasts like the infamous Victoria's Secret fashion show.

Streaming media companies say this support has been critical as video becomes more prevalent online.

"As we move to huge audiences and broadband bit rates, it's a requirement to be able to distribute and serve content from the edge of the network," said Adam Selipsky, senior manager for infrastructure at RealNetworks, which has relationships with more than a dozen content-delivery services.

Alliance poker
The landscape shifted substantially in August, when the Inktomi and Cisco-led groups each announced their presence on the scene.

Despite the similarity of subject and name, the two groups have different aims. Cisco's Content Alliance is serving primarily as a standards-focused coalition, while Inktomi's Content Bridge members are teaming to offer a service that competes directly with Akamai.

One of the most critical variables in the business is size--the more servers a company or alliance has scattered across the world, the more likely it is that any one of them will be close to any given Web surfer.

Akamai took an early lead by this measure and as a result has attracted many of the Net's biggest names as customers, from Yahoo to CNN. Content Bridge companies like Adero, Digital Island and Exodus plan to allow each of their networks to exchange content, hoping to match Akamai by erasing the lines between their individual networks.

The Bridge companies have already run trial projects and are in the process of pushing the cross-network system into beta tests, said Adero senior vice president Al Fink.

But many analysts are still skeptical about the group's ability to deliver effectively, passing up Akamai's reach as it promises.

"They still don't have as broad a distribution network set up yet," said Jupiter Media Metrix analyst Peter Christy. The Bridge companies also will have political issues to deal with as it launches, deciding how to charge customers and distribute revenues, Christy noted.

The call to create standards that allow all the content networks to talk to each other has been taken up by both alliances. Cisco and Inktomi each say they've extended an olive branch to the other, but have been rejected. Both are planning submissions to the Internet Engineering Task Force, a leading Net standards body.

"We made the suggestion (of a joint submission) to Cisco, and they have declined interest in doing that," said Inktomi vice president Peter Galvin. Nevertheless, the two groups share several members, and so a considerable amount of information flows between them, he noted.

Cisco senior marketing director Jim Ricotta said his group informally suggested that Inktomi merge its drive into the Content Alliance standards efforts, but that Inktomi also declined. The Alliance plans to have its proposal to the Net standards body by early next year, Ricotta said.

Akamai itself is remaining outside the standards drive for now--a significant omission, because it has done as much as or more than any company to shape the market in the past year. The company is still in wait-and-see mode.

The alliances "are still very early on in their formation," said George Kurian, Akamai's vice president of product management. "Some of these things are so early in deployment, it's unclear what they're actually talking about."

The lack of Akamai's support or participation isn't a good sign for any genuine standards effort, because standards need to be market-driven to succeed, analysts say. But the company's hesitation at this point does not necessarily doom future efforts.

"Akamai is reasonably supportive of standards, but it's moving at a much faster rate as a business," Christy said.

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