Akamai (NASDAQ:AKAM, news, filings) won a big victory from the carrier world this morning, announcing a strategic alliance with none other than AT&T (NYSE:T, news, filings). The two will be combining AT&T’s global IP network portfolio with Akamai’s CDN platform in a jointly marketed, managed, and supported suite of solutions. They’ll be starting out in North America, with expansion worldwide to follow within a year.
AT&T’s content delivery journey has been a long one. Three years ago, they were busy rolling their own. Since then they’ve been working with partners on a hybrid solution, with EdgeCast being the unannounced party there. Now it seems they’ve decided to go with the best-of-breed approach while focusing on their traditional strengths, with EdgeCast or whoever their previous partner was being the odd man out.
Akamai will be deploying CDN servers at AT&T’s IP network edge and within its facilities around the US. AT&T will take its existing CDN operations, customers, and services and put it onto the Akamai platform during 2013. Sounds like they have finally made up their mind and decided to unify their various other approaches, although I look forward to additional color on that.
The alliance will give both AT&T and Akamai the tools necessary to take on Level 3’s dual network/CDN approach without the networking giant needing to scale its CDN from scratch and without the latter needing to acquire actual physical network assets. Akamai will gain access to AT&T’s global enterprise customer lists, and AT&T will be able to better optimize its network cost structure by directly working with the largest CDN.
This could be a major shift in the CDN market if they manage to make this alliance work, but there will probably be a culture clash to get over first. One wonders though if an eventual merger of the two might be the end result if things go well.
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With all T’s recent activity and plans, would it benefit VZ to do something with LVLT?
Remembering Dr. Leonard Kleinrock, an internet pioneer and founding father’s prescient words regarding T or Telephone a few years back is important at this time.
“AT&T was right in the short term to shun the internet circa 1969, but very WRONG in the long term indeed.”
He also suggested network owners would continue to suffer the consequences of their shortsightedness for some unspecified time.
This MIT alumni and UCLA Prof must have a smile on his face this morning.
I want to send a message back to the east coast Brain Trusts concocting these hybrid solutions in the midst of a public who has suffered through their “network” monopolies and oligopolies even while they are seeking a revived approach for bringing eyeballs to eyeballs seamlessly around the globe.
AT&T is still WRONG in the LONG TERM, and this is TOO LITTLE too LATE! I have a last mile “story” I might feel like sharing on another occasion, but TREX the DINOSAUR is going to be embedded in the La Brea Tar Pits with or without Akamai! imo
Verizon and Softbak’s Sprint are’t going to just lay down on this one. They will have to turn to Level 3’s CDN and world class all IP Internet backbone to compete with AT&T.
What does the streaming expert, Dan Rayburn, have to say about all this hoopla?
I’m glad you asked about Dan Rayburn, here is a link to what he said today: http://blog.streamingmedia.com/the_business_of_online_vi/2012/12/att-finally-gives-up-on-their-in-house-cdn-will-resell-akamais-cdn-services.html
CarlK, you need to think about a Level 3 backbone and a Google wireless last mile access combo.
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DEC
6
Google “Will Discuss” Owning a Mobile Network
From time to time, speculation arises about whether any of the four leading “Internet” firms in the U.S. market (Apple, Google, Facebook, Amazon) would seriously examine ownership of a branded mobile network. Half of those firms already are in the smart phone business, three are in the tablet business and Facebook, off and on, is rumored to be considering producing its own smart phone.
So is Google, for example, looking at owning a wireless network? “I’m sure we will discuss this,” says Google Chairman Eric Schmidt. That doesn’t necessarily mean Google will act.
But Google appears to believe that abundant spectrum could become a reality. If that happens, the barriers to a branded Google mobile service would seem less formidable.
“The current spectrum shortage [currently facing the mobile industry] is real, but it’s an artifact of a licensing and regulatory error,” said Schmidt. “New technology allows there to be lots of spectrum, far more than you could use.”
Posted 8 hours ago by Gary Kim
http://ipcarrier.blogspot.com/2012/12/google-will-discuss-owning-mobile.html
Ben Graham, LEVEL(3), Walter Scott, JamesCrowetonite, Skibare even!, or whoever the hell else you are hiding behind that mask, are you trying to edge me into telling you a “STORY” why The Titans inside the “LAST MILE” especially tied to “residential internet services” are readying for a FATE so bad and ugly that Warren E. Buffett will finally know what they look like in less than FIVE YEARS????
Go ahead, keep edging me on because you won’t have egg on your face if you do! I also like using the former “edge” vs. the latter, “egg” in this expression for “DARE!” 🙂
Warren Buffett has said he wouldn’t invest in AT&T or Verizon because he doesn’t know where they will be in 5 to 10 years. On the other hand, one of Warren’s best friends, WalterScott knows who is the friend of the Internet trend – Level 3.
STT invested in Level 3 for 100 years. Softbank bought Sprint for the next 300 years. But Google and Microsoft will put egg on everybodies face if they start using license free unused TV white space for last mile access with the world leading powerful Level 3 Backbone.
The next five years will be a royal battle. Hold your LVLT shares – you will be happy.
But, but, but, Warren E. Buffett’s most trusted adviser and legal brain trust representing his right brain said, “Walter Scott is great,” at the same time, “LVLT is too hard to figure, so you will have to go that one alone,” son…..
If you are Skibare, the next time you give Mr. Munger a ride in your taxi when he is visiting Boulder, CO, make sure you tell him to “THINK AHEAD” as though he is “DEAD” not unlike those Asian others you are comfortable quoting. 🙂
Hmm, this is no SuperDan, like Caruso of Zayo, I can inform you. According to his blog, he holds NO SKIN in the GAMES of the companies he discusses and is more content with garnering tasty consulting fees in concert with utilizing his spheres of influence to tout imminent deals which never come to pass, RIGHT? I am not saying he is WRONG on his assessment of how paltry this deal is for T/Akam, but one has to be cautious with what they hear from Dan Rayburn. imo
http://blog.streamingmedia.com/the_business_of_online_vi/2011/11/limelight-and-level-3-expected-to-make-joint-announcement-shortly.html
CarlK, just because Buffett & Munger go the easy low hurdle filter basket of yes, no, or to hard to figure, doesn’t mean that Level 3 has no intrinsic value that is worth the equivalent of 10 cent for a dollar.
Two other super investors – Prem Watsa and Mason Hawkins have more courage than the wimpy Warren and Charlie “too hard to figure” guys.
The golden egg is Level 3’s future huge huge free cash flows that are tax free, because of the NOL’s.
I will say this about Charles T. Munger being an enigma. Importantly, he admires Asians in general for their smart, hard work ethic, but more importantly Singaporean leadership especially as respects their stance against corruption and Lee Kuan Yew being a most respected individual from his perspective. Caning as one form of their historical corporal punishment should not be missed, and considering the state of American Finance, especially the acts of crime by Wrong Street against humanity everywhere, this strategy would do its citizens well by being incorporated here.
I digress; however, except to say that The Singapore Govt. is Level 3’s largest owner to date, and somehow Charles T. can understand Chinese car mfg. companies heading towards greener electric technologies with more limited “population” penetration, i.e. addressable markets, versus EVERY pair of global eyeballs in one way or another being connected over The Level 3 Network.
Have Skibare contact him from his cab phone, and alert him to this oxymoron! 🙂
Interesting innovation while dovetailing their data mining pattern finding techniques of police forces including NYPD. I wonder if they have already “patented” it, and/or if Akamai as well as any others can do this?
http://blogs.wsj.com/cio/2012/12/06/networking-vendor-tries-to-stop-cyberattacks-before-they-happen/
Ben Graham, there is at least one more Bear Case argument tied to The Oracle and his RIGHT BRAIN that is usually “DAMN RIGHT!” to be presented even though we know this blogger, Mr. Powell, along with some others had been able to sleuth the fact that The Oracle’s insurance companies have the bonds buried deep in their vaults while continuing to shun the common man’s fool fodder, err, common stock shares.
According to The Oracle, who has no clue what T or VZ will look like in five or ten years, his two new fund managers, TNT or Todd&Ted, take no instructions from him for their investment decisions.
Apparently, each maintains an affinity towards tech stocks as well; therefore, it is reasonable for Bears to be overconfident at least until one or both of them dip their toes that don’t twinkle into LVLT’s dirty pool water from a “dilution” perspective.
With the stock price so low, it seems unusual that they still can’t see unlocked value the way these two others whom you point to, O.Mason and Prem are able to.
CarlK, You make a good point that Warren’s new men, Todd & Ted, will not throw Level 3 in the “too hard to figure” waste basket, like Warren Buffett & Charlie Munger do. TNT will some day buy up the intrinsic value of LVLT from the maniac “Mr. Market”, who has discounted the proper fair price on Level 3 for way too long.
Ben Graham
Attn.: Ben Graham, Skibare, et al. This Great Builder, Mr. Walter Scott Jr., “Hold onto your shares, you will be happy,” this man who sits on the right hand side of Charles T. Munger, who is sitting on the right hand side of The Oracle himself, seems to have had a little indigestion holding onto his shares this week after Charles T. made him burp with another comment it appears.
Apparently, the new Admiral on deck from Global Crossing was there also, and threw up twice as much on a “percentage basis.”
http://www.sec.gov/Archives/edgar/data/794323/000122520812024915/xslF345X03/doc4.xml
http://www.sec.gov/Archives/edgar/data/794323/000122520812024916/xslF345X03/doc4.xml
But, but, but ValueCarlK,
All the men on the right side of cool hand WEB will not capsize the world class all IP video network of Level 3. The world needs a backbone very badly when all the live HD video created, needs to be streamed/delivered to all those billions of screens around the globe, to those consuming eyeballs – any time any where.
Just because the chairman and the Admiral Archie Clemins sold some shares for Christmas giving, does’t mean STT, Hawkins and Watsa still don’t have the whole wide IP world in thier hands.
Carl, I’ll have to hand it to you for doing the Munger “invert – always invert”, but I have to let you talk to the hand. The LVLT IP ship will right it’s self and sail/stream around the world bit by bit – flawlessly! The right men will not jump ship and will soon be promoted to captions. Charlie & Warren are scrubbing the deck for Walter Scott, the TNT boys are the top guns who will captipulate off the deck in thier AT&T – Verizon fighter jets.
Ben Graham
Just
The inversion goes as follows: When “Stevie” cohen finally finds his way into the slammer, LVLT will rise exponentially into perpetuity.
http://finance.yahoo.com/news/exclusive-authorities-probe-sac-capital-000004593.html
By the way, sources are confirming that the Monopolist, AT&T, is retreating one of their key divisions from their original home in NJ, to their newer home in Texas. Are Monopoly Walls beginning to be breached and walls readying to tumble down?
Warren E. Buffett to Joe Kernan, “I don’t know what AT&T or VZ are going to look like in five or ten years……
It would certainly be nice to see Big (3) get added to the S&P sooner rather than later.
http://www.forbes.com/sites/dividendchannel/2012/12/07/level-3-communications-larger-than-sp-500-component-safeway/
After Stevie gets locked up for 50 years, AT&T’s pension fund needs to be investigated for manipulating LVLT stock. Also, the workers pension fund at Verizon and Comcast – all the bells & cables. Dam it somebody blow the whistle on how LVLT has been drug through the Wall St. gutter by these crooked pension funds.
Ben Graham is Turing over in is grave.
WHOA!!!!!!!!!! I know this “MASKED MAN” and he does not lie nor deceive. “Bring it on!,” so the world may be at least partially cleansed!
Ok guys, time to lay off the spiked eggnog.