After investing $11.5 million in content delivery network BitGravity Inc in 2008, Tata Communications has now acquired the California-based company for an undisclosed amount. Tata Communications Netherlands B.V. will own 100% of BitGravity Inc, which will operate as a wholly-owned subsidiary of Tata Communications.
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Founded in 2006 by Perry Wu, a venture capitalist at ComVentures and Barrett Lyon, BitGravity raised a total of $13.5 million so far, from angel investors, boutique investment bank Allen & Company LLC and Tata Communications.
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“As a combined entity, we can propel our position in the market, and the opportunity to accelerate our vision on a significantly larger scale was one we couldn’t pass up," said Wu.
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The two companies have had a strategic alliance for the past two years, enabling Tata Communications to license BitGravity’s CDN technology, which it will now own. It also gains BitGravity's customers in Europe, Asia and India such as NDTV, Quick Heal Technologies and Nimbus Communications.
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"Two years ago, we made an investment in BitGravity to provide content delivery services for Tata Communications. With the success we have seen in the marketplace and our ownership of BitGravity, we can now fully invest in the potential that exists around the globe and accelerate the delivery of new features and services to our customers," said Genius Wong, Senior Vice President, Global Network Services, Tata Communications.
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Competition
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Tata Communications gets a leg up with BitGravity in technology as well as global reach, but will face severe competition. The global content delivery market has a host of large players including Reliance Globalcom, Akamai Technologies Inc, Limelight Networks, Level 3 Communications Inc and Cotendo Inc.
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In January 2010, Limelight Networks partnered with leading Indian telco Bharti Airtel to set up 2 new CDN points of presence in Mumbai and Chennai and, globally, is aided by its acquisition of video publishing and analytics company Delve Networks. Akamai Networks has a headstart in India and jointly offers an application delivery solution for enterprises with networking major Cisco Systems. It recently lost a patent ruling against Limelight Networks in US courts where it alleged that intellectual property related to content delivery networks were infringed upon.
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Reliance Communications' Globalcom meanwhile continues to expand its global Ethernet network (which currently reaches 163 countries) and has recently tied up with carrier Ethernet exchange service CENX Inc. Another application acceleration and WAN optimization firm Aryaka Networks raised $14 million funding from Nexus Venture Partners, Trinity Ventures, Mohr Davidow Ventures and Stanford University last year. Aryaka was founded by Ajit Gupta who sold Speedera Network to rival Akamai for over $500 million in 2005.
