Akamai Partners with Brightcove - Analyst Blog

Akamai Technologies Inc. (AKAM), a leading provider of cloud optimization services, has formed an alliance with the cloud-based video platform company, Brightcove. The alliance is expected to make video publishing and distribution easier for all sizes of professionals and business organizations over the Internet.

 

Online video is gaining huge popularity with an increasing use of the Internet and a plethora of mobile devices in the market. Marketers, big and small alike, are using online videos to attract, engage and retain audiences globally.

 

According to research firm eMerketer, 33% of online adults in the US, or 58.9 million people, will watch full-length television shows online in 2010 on a monthly basis. Among adults who already watch video regularly online, the rate is even higher, at 50% at the end of June.

 

Currently, there are only a few cloud-based companies in the market who have adequate expertise in producing high definition videos over the net.

 

Akamai through its HD network provides a smooth and interactive platform to its global customers for their online video products. On the other hand, Brightcove offers solutions that deal with video content management, encoding, publishing, monetization and analytics.

 

The alliance aims at improving quality and performance and provides innovation to high definition (HD) online videos across a diversified customer base, which includes the leading media, e-commerce and enterprise companies as well as small businesses around the world.

 

Brightcove will provide the Akamai HD Network service as a part of its online video platform. We believe the partnership will be beneficial for Akamai as it will enable it to meet the growing demand for innovative online videos of high quality in a short span of time.

 

 

We maintain a Neutral recommendation on Akamai on a long-term basis (6 to 12 months), due to increasing operating expenses, higher capital expenditure and a sluggish macroeconomic environment.

 

Akamai continues to face stiff competition from large companies such as Level 3 Communications Inc. (LVLT) and Limelight Networks Inc. (LLNW).

 

However, we believe an increasing usage of cloud computing technology and partnerships with companies such as International Business Machines Corp. (IBM) and Brightcove will boost its profitability going forward.

 

Currently, Akamai has a Zacks #3 Rank, which implies a Hold rating on a short-term basis.