Thursday, July 3, 2008

Cache & Packets

New players aim to put the squeeze on Akamai

By Efrain Viscarolasaga

The content delivery service game is an $800 million market, according to IDC, and is set to become an increasingly important segment of the Internet’s core as video becomes commonplace.

On the network delivery side, Cambridge-based Akamai Technologies Inc. (Nasdaq: AKAM) and its California rival Limelight Networks Inc. (Nasdaq: LLNW) have become the leaders in the space, but as related management and services become a bigger part of customer needs, other factions, including carriers, are looking to get into the game.

Last week, AT&T Corp. (NYSE: ATT) announced that it would invest $70 million over the next six months in network infrastructure upgrades and the creation of a content distribution business unit. As part of the portfolio, AT&T will initially integrate the software of three partners, including Newton’s own ExtendMedia Corp., which makes platforms for the creation and delivery of multimedia applications.

AT&T’s offering, which is expected to expand over time in terms of investment and partners, seems to be aimed directly at Akamai’s territory. “In speaking with our customers, they have made it clear they are looking for an alternative to (such as) Akamai in terms of content delivery services,” said Jim Daugherty, executive director of content delivery services.

For their part, Akamai has been moving into the digital content services space for some time, and acquired Nine Systems Inc. in 2006 to help bolster that effort. The company seems unfazed by AT&T’s announcement, and according to a spokesperson, has been competing with AT&T for going on eight years.

For ExtendMedia, the deal adds another carrier to its customer list — it has a similar partnership with Bell Canada — but it does not threaten its relationship with Akamai, said founder and CEO Keith Kocho.

“Probably half our customers work with Akamai, and the other half work with Limelight,” he said. “As AT&T and others roll out these kinds of things, competition will get stronger for Akamai and Limelight, but that’s good. It’s a sign the space is maturing rapidly.”

Hot launch for super-cool wire grid
Over the past year or so, American Superconductor Corp. in Devens has been very public in discussing its success surrounding its wind-power projects, most of which stem from the firm’s January 2007 acquisition of Austria-based Windtec Systemtechnik GmbH. But lest we forget, as its name indicates, the company’s original breakthrough came in high-temperature superconducting (HTS) wire.

The company has deployed its HTS wire in a number of off-grid scenarios over the years, including at various wind projects, but last week celebrated the commissioning of what officials called the “world’s first high-temperature superconductor power transmission cable system in a commercial power grid.”

The project, located on Long Island, N.Y., began in 2003, as a cooperative agreement between the U.S. Department of Energy, American Superconductor and the Long Island Power Authority. The DOE ponied up $27 million of the $58.5 million project with LIPA and other partners picking up the difference.

What’s interesting is that the true advantage of the new transmission wire is measured more significantly in feet, rather than megawatts. Granted, the HTS cable can carry five times the amount of power than traditional copper wire, but does so in a much smaller package: “Hair thin” wires, according to AMSC documents. What that means is power companies such as LIPA can upgrade existing lines in a space of about four feet without having to expand their rights of way, always a costly and difficult procedure.

When operated at full capacity, the HTS cable system is capable of transmitting up to 574 megawatts of electricity, enough to power 300,000 homes. There is a Phase 2 planned for the Long Island project, which could receive an additional $5 million in funding from the DOE and 60,000 meters of cable from AMSC between now and 2010.

Sun spot baby
Celebrating completion of another alternative energy system is Connecticut-based Lee Co., which makes precision fluid control components for the aerospace, gas and oil and scientific instrumentation industries.

The 50-year-old company this week lit up its 309 kilowatt solar electric system, affixed to its manufacturing plant in Westbrook. The system, which includes 1,760 photovoltaic panels and covers 29,000 square feet, was designed by Bedford-based Gloria Solar LLC, a joint venture between Bedford’s Spire Corp. and Taiwan-based Gloria Solar Co. Ltd.

The project, which is the largest solar array for a manufacturing facility in the Nutmeg State, according to officials, was funded in part by a $1.2 million grant from the Connecticut Clean Energy Fund. Lee Company also took advantage of the Federal renewable energy investment tax credit program (ITC), which deferred an undisclosed amount of the cost.