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Akamai, CacheFlow team
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March 28, 2000: 3:33 p.m. ET
Web data storage and content providers bundle high-speed offerings
By Staff Writer Michele Masterson
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NEW YORK (CNNfn) - Internet content distributor Akamai Technologies and Internet caching technology provider CacheFlow Inc. Tuesday announced an alliance under which the companies will integrate their solutions.
Financial terms of the deal were not disclosed.
The non-exclusive agreement blends the hardware and software sides of content and caching distribution. CacheFlow will use Akamai's FreeFlow services in its caching appliances to enable e-commerce and content Web sites to automate and speed the process of distributing Web content delivery to Web users.
CacheFlow said it will also resell Akamai's FreeFlow service with its caching appliances.
 In late day trading, shares of Akamai traded down 5-11/16 to 203 and CacheFlow fell 3-1/2 to 118-1/2. Both firms had hugely successful initial public offerings last year.
Caching technology involves storing data collected from Web sites. An Internet browser cache stores Web pages in its memory and also on disk so that users can revisit those pages without going through the servers that host the content. CacheFlow (CFLO: Research, Estimates) provides caching hardware, while Akamai (AKAM: Research, Estimates) offers content distribution, taking the content and hosting it from multiple places on the Internet.
"Instead of the entire Yahoo! page coming to me from Yahoo!'s home server, which may be very far away from me in network terms, a lot of that content will come from an Akamai server, that from a network perspective, is a lot closer to me, and as a result, the whole page loads faster," explained Joe Laszlo, senior analyst at research firm Jupiter Communications.
"It's that performance improvement that content distributors have as their key value," said Laszlo. "By distributing content throughout the Internet, they can improve performance from an end-user's perspective."
 CacheFlow appliances will be used on content providers' Web servers and on Akamai's network of more than 2,000 servers. The CacheFlow appliance will navigate Web site requests and will distribute the content according to specifications of the site. The content is then delivered through Akamai's FreeFlow service, to speed Web page requests.
Jupiter Communications estimates that the combined market of caching and content distribution will be valued at $400 million this year, climbing to $1 billion in 2001 and $4 billion in 2003.
"There is potentially a threat to other caching providers, ones that don't have deals," said Laszlo. "Inktomi does have a deal with Digital Island that happened before Digital acquired Sandpiper, the most directly competing service to Akamai."
 CacheFlow rivals include Inktomi (INKT: Research, Estimates) and Network Appliance (NTAP: Research, Estimates). Akamai competitors include Digital Island (ISLD: Research, Estimates), hosting companies such as Exodus Communications (EXDS: Research, Estimates) and privately-held, Boston, Mass.-based Adero.
"Since it's a non-binding agreement, Akamai has the ability to target other caching vendors to help them re-sell their services," said Alex Benick, an analyst with the Yankee Group in Boston. "I don't think it would be unreasonable to see Network Appliance form a similar agreement with Akamai."
Last week Adero acquired content distributor StarBurst Software, whose clients include General Motors, Ford, Chrysler, Wal-Mart, Kmart, The Gap, Rite Aid, Choice Hotels, Promus Hotels, Optimark, Nomura Securities, Thomson Securities, Microsoft, and Dow Jones. 
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