AT&T (NYSE: T) has struck a deal with Akamai for content delivery services in a deal that turns former competitors for video and data delivery into partners.
The agreement, announced Thursday, calls for the two companies to jointly sell and manager the service.
AT&T, the largest U.S. phone company, plans to sell business users the Akamai service as part of its expanding Internet offering that includes data-center information storage and cloud computing, said Fletcher Cook, an AT&T spokesman.
Content-delivery services offer businesses fast, efficient transport of massive data packages, such as video and Web applications.
“The alliance with Akamai positions us perfectly to deliver premier content delivery solutions to our business customers,” said Andy Geisse, chief executive officer for AT&T Business Solutions. “By embedding Akamai’s technology within AT&T’s IP network, our customers now have access to a suite of solutions that more than meet their need for content delivery and support. In an environment where companies and consumers alike are accessing video content and other applications online and from a multitude of devices, I can’t think of a better way to address the explosive growth in content that is sweeping across industries like media and retail.”
Added Akami CEO Paul Sagan: “Aligning Akamai’s services with the global reach, scale and product depth of AT&T creates a powerful relationship aimed at helping enterprises optimize their online businesses. Together with AT&T, we share a common goal of developing solutions to maximize the Web and mobile end user experience, while driving down network-related costs and improving network efficiencies. We believe there will be tremendous value to customers in deploying within AT&T’s robust IP network, and in jointly going to market with leading content delivery and cloud infrastructure offerings.”
The deal makes sense to two analysts.
“AT&T is pairing up with arguably the best name in this business and it allows them to simplify their product offerings,” said Chris Larsen, an analyst with Piper Jaffray & Co. in New York.
While the pact is a reselling agreement, it will be offered as a feature integrated into AT&T’s network, said Cook. The contract with Akamai is a multiyear deal, said Cook, who declined to disclose the terms.
“The deal allows Akamai to leverage the huge enterprise sales force of AT&T,” said Kevin Roe, of Roe Equity Research LLC based in Dorset, Vermont.
Akamai will seek more partners around the world for agreements like the one with AT&T, said Brad Rinklin, chief marketing officer.
“Our goal is to bolster the amount of money we get through our partner strategy. You’ll see a number of different things,” Rinklin said. Akamai already partners with about 1,000 networks and is working to find which ones can sign on to more significant deals like that with AT&T, he said.
(Bloomberg news contributed to this report.)
