Navisite to Resell CDN Services from EdgeCast; Focus on Medium Sized Customers

Includes: DTEGY, NAVI
by: Dan Rayburn

Hot on the heels of EdgeCast signing up Deutsche Telekom (DT) to resell their CDN services, EdgeCast announced another partnership this morning with managed hosting provider NaviSite.

This is a natural fit between the two companies and one of those deals where it doesn't look good just on paper. While NaviSite currently has some CDN service of their own, the company made a strategic decision almost two years ago not to invest any more money into their CDN business and to not come into the crowded CDN market. Probably a smart move on their part to instead focus on services outside of content delivery like managed hosting and application services.

Reselling the EgdeCast CDN will let NaviSite (NASDAQ:NAVI) transition customers off of their infrastructure over time and also give them more services to sell since EdgeCast's CDN product has more functionality for things like streaming and support for Flash.

This is also a good tie up between the two companies, as NaviSite already knows what CDN is, has the technical depth to understand the technology and should be fairly easy for their sales force to sell the offering. While NaviSite's sales force will now have the ability to sell more advanced CDN services, they are not looking to compete with the pureplay CDNs in the market and intend to focus on selling CDN to their current crop of customers.

EdgeCast says they have close to 25 resellers now for their CDN services and have even more in the pipeline. I like the way EdgeCast is using other companies to act as their sales force and letting the channel of resellers push customers onto their network. It's a smart move for EdgeCast as they have managed to sign up over 300 customers to date, while only having raised a very small amount of capital.

Since launching, EdgeCast has stayed very focused on going after medium sized customers and is not getting caught up in trying to focus on the really large content owners that all the other major CDNs seem to be fighting over.

Disclosure: None