If we look at the P/R issued by Reliance, it sounds like Internap will be establishing a CDN PoP in a Reliance data center, that will be then run by Reliance - something like the professional services sold to QTS recently? Hopefully (if this is the case...) the accounting of this installation service will be considered non-recurring, to avoid a jump in CDN revenues (followed by a decline the next quarter). How will the two Companies share revenues? There are more questions than answers, as no economic term has really been disclosed.
As long as no further detail is given about the agreement, all the above is pure speculation on our side.
>>Under the alliance, Internap would set up a new Point-of-Presence in India which would be integrated with its Global Delivery Infrastructure spanning 7 countries(Australia, China, Singapore, Japan, US, UK and Netherlands). The Point-of-Presence in India would be established and managed by Reliance Globalcom.
The alliance provides Reliance Globalcom the required expertise to integrate media servers, enhance storage, accelerate its network and optimize routes to deliver, manage, and monetize media content. The global infrastructure includes Internap’s patented MIRO (Managed Internet Routing Optimizer™) and ADN technologies. MIRO monitors the performance of Internet backbones and automatically selects the best path to global destinations, thus providing faster content delivery.
Let's see what Tier 1 Research said about the deal back on July 28:
>>Internap delivering from Atlanta to Mumbai with help of Reliance
Internap will expand into India's telecom market with CDN services through a new alliance with Reliance Communications' Reliance Telecom. Rather than implement a standard reseller partnership, Internap is going to help Reliance build and operate CDN services in selected regions in India. <<
A comment to the deal, from Telecom rumblings:
>>I’ve been a skeptic about carriers entering the CDN market directly, but partnerships like this make a great deal of sense. Internap and Reliance Globalcom are not competitors. Reliance did buy Yipes which used to sell IP Transit, but they have since de-emphasized the product almost completely in favor of ethernet and VPLS. Internap doesn’t sell ethernet or VPLS. So if an aggressive carrier like Reliance wants to enter the CDN space but doesn’t really have the assets to do it directly, a partnership with Internap’s CDN in which India gets hooked up is a case where nobody loses and everyone stands to gain.<<
and a comment to the article:
>>By the way, the ‘partnering’ deal with Internap smells a lot more like someone is gearing up to go steady, given RG’s growth strategy and its recent history of acquisitions.
Frank A. ColuccioA few months ago, Bit Gravity and Tata had signed a similar agreement:
>>MUMBAI, India and BURLINGAME, Calif., March 5, 2008 –
Tata Communications, (NYSE: TCL) a leading provider of the new world of communications, and BitGravity, Inc., the pioneer in Content Delivery Networks (CDNs) for interactive broadcasting, announced today a strategic partnership. Tata Communications will co-brand, resell and jointly market BitGravity’s technology platform worldwide as part of a value-added services offering on top of Tata Global Network. As part of the arrangement, Tata Communications, with a global presence in more than 200 countries across 300 PoPs will provide tight integration with BitGravity’s platform and their carrier-grade infrastructure, including collocation and IP-network capacity, and local sales presence in each region for the CDN offering. BitGravity will provide technology and manage the content delivery operation. The service will be sold in Europe and Asia and branded as Tata Communications’ CDN Powered by BitGravity.
Several Reliance managers have an Internap experience in their C.V., and this might have helped finalize the deal:
John Scanlon, Chief Executive Officer
John Scanlon became CEO of the Company in September 2004 and is a20-year veteran of the telecommunications and data services industry. Before joining the Company he held a variety of senior positions at Internap, a network services provider of high-performance IP solutions. Most recently, he was Internap's Vice President of International and Corporate Development, but also served as Chief Financial Officer and Vice President of Service Planning during his five years there. Prior to Internap, Scanlon co-founded international telecommunication services provider Flat Rate Communications. He served as CEO of FlatRate from 1996 to 1998, when he sold the company to European telecom provider Viatel and became General Manager of the new Viatel subsidiary. Scanlon also spent over a decade at MCI in a variety of finance, business development and marketing roles.
Scanlon holds an M.B.A. from St. Mary's College of California and a bachelor's degree in Business Administration from Oregon State University.
Keao Caindec, Chief Marketing Officer
Keao Caindec is responsible for Reliance Globalcom's marketing strategy and operations, including product marketing and management, business development, and marketing communications and programs. Caindec is a seasoned executive with deep marketing and business development experience in data communications, network optimization and acceleration, content distribution, IP route-control, VoIP, ATM, MPLS internetworking and network security. Prior to joining the Company in 2005, Caindec was a Principal and Founder of Farallon TechnologyResources, a solutions provider for advanced network services andtechnologies. Prior, he was Executive Director of Alliance Development at Internap, a network services provider of high performance IP solutions. Caindec has also held senior management positions in marketing at CyberCash (acquired by Verisign), MCI Communications, ATMnet (acquired by Verio) and British Telecom North America (Tymnet), the early pioneer of packet-switched networking.
Caindechas a bachelor's degree in Economics with a Concentration in Entrepreneurial Management from The Wharton School, University of Pennsylvania.
Richard Cotton, Vice President, Operations
Richard Cotton is a seasoned executive with over 20 years experience in telecommunications, technology, and law. Prior to joining the Company, Cotton was with Internap Network Services Corporation, a leading provider of managed IP services, from 1999 through 2006 holding several senior positions including Vice President of Carrier Relations, Business Operations and Data Center Services.
Prior to Internap, Cotton was with Winstar Communication as a Senior VicePresident of Operations. He began his career with Winstar in 1996 as Vice President and General Counsel for the telecommunications subsidiaries. From 1993 to 1996 Cotton was in-house counsel for MCI Telecommunications Corporation. As Director, Law and Public Policy, Cotton was Lead Counsel for MCI's National Account/Global Accountmarket segment generating revenues of approximately $2 Billion annually. Prior to MCI, Cotton was in private legal practice from 1985 through 1993 with the New York law firm of Brown, Raysman & Millstein specializing in High Technology and Telecommunications matters.
Reliance is a great partner for Internap, for their strong presence in India, but also a very interesting Company worldwide.
Let's have a look at their recent Investor Presentation (thanks to VG for the heads up, and the comments in RED have been added to the slides):
They are already claiming to be among the top 3 data center operators...
Equinix mention (for EBIDTA results)
Landing in markets where Internap has data centers
Claiming 1 million sq. ft. of data center space, 260.000 in India, the rest internationally (with a few locations in the East Coast)
Leading position in the Indian market (over 60%...)
A strong Company, financially, pursuing M&A to achieve its goals.
A look at Reliance Flag peering policy and presence:
| Company Information | |
| Company Name | FLAG Telecom |
| Also Known As | |
| Company Website | http://www.flagtelecom.com |
| Primary ASN | 15412 |
| IRR Record | AS-FLAGP |
| Network Type | NSP |
| Approx Prefixes | 8000 |
| Traffic Levels | 20-50 Gbps |
| Traffic Ratios | Balanced |
| Geographic Scope | Global |
| Looking Glass URL | |
| Route Server URL | |
| Notes | |
| Protocols Supported | Unicast IPv4 Multicast IPv6 |
| Date Last Updated | 2008-06-03 03:54:38 UTC |
| Peering Policy Information | |
| Peering Policy URL | |
| General Policy | Selective |
| Multiple Locations | Not Required |
| Ratio Requirement | No |
| Contract Requirement | Private Only |
Public Peering Exchange Points | |||
| Exchange Point Name | ASN | IP Address | Mbit/sec |
| AMS-IX | 15412 | 195.69.144.72 | 3000 |
| AMS-IX | 15412 | 2001:7f8:1::a501:5412:1 | 3000 |
| Any2 LAX and SJC | 15412 | 206.223.143.45 | 1000 |
| DE-CIX | 15412 | 2001:7f8::3c34:0:1 | 3000 |
| DE-CIX | 15412 | 80.81.192.64 | 3000 |
| Equinix Ashburn | 15412 | 206.223.115.141 | 2000 |
| Equinix Tokyo | 15412 | 203.190.230.7 | 1000 |
| HKIX | 15412 | 202.40.161.196 | 2000 |
| JPIX | 15412 | 210.171.224.139 | 1000 |
| JPNAP Tokyo | 15412 | 2001:7fa:7:1:0:1:5412:1 | 1000 |
| JPNAP Tokyo | 15412 | 210.173.176.96 | 1000 |
| KINX | 15412 | 192.145.251.42 | 1000 |
| LAIIX | 15412 | 198.32.146.52 | 1000 |
| LAIIX | 15412 | 2001:504:a::a501:5412:1 | 1000 |
| LINX | 15412 | 2001:7f8:4:1::3c34:2 | 2000 |
| LINX | 15412 | 195.66.226.146 | 2000 |
| LINX | 15412 | 2001:7f8:4::3c34:1 | 2000 |
| LINX | 15412 | 195.66.224.146 | 2000 |
| NL-IX | 15412 | 193.239.116.139 | 1000 |
| NYIIX | 15412 | 2001:504:1::a501:5412:1 | 2000 |
| NYIIX | 15412 | 198.32.160.88 | 2000 |
| PAIX Palo Alto | 15412 | 2001:504:d::89 | 2000 |
| PAIX Palo Alto | 15412 | 198.32.176.137 | 2000 |
| SFINX | 15412 | 194.68.129.170 | 1000 |
| Terremark NAP de las Madrid | 15412 | 193.227.132.57 | 1000 |
| XchangePoint | 15412 | 217.79.160.102 | 1000 |
Private Peering Facilities | ||||||
| Facility Name | ASN | City | Country | SONET | Ethr | ATM |
| Equinix Singapore | 15412 | Singapore | SG | |||
| FiberNet Telecom Group - 60 Hudson St | 15412 | New York | US | |||
| FiberNet Telecom Group New York (111 Eighth Ave) | 15412 | New York | US | |||
| KINX IX Center | 15412 | KR | ||||
| MEGA iAdvantage Hong Kong | 15412 | Hong Kong | HK | |||
| One Wilshire Los Angeles | 15412 | Los Angeles | US | |||
| PAIX Palo Alto | 15412 | Palo Alto | US | |||
| SARA Amsterdam | 15412 | Amsterdam | NL | |||
| Telehouse London (Docklands East) | 15412 | London | UK | |||
| Terremark Madrid | 15412 | Madrid | ES | |||
At first sight, they are peering at Equinix Ashburn and Singapore, where Internap has a pnap, and at 111 8th Avenue, where Internap has one of its own data centers (New York). Plus the main places where you would expect to find them.
Recently, Flag experienced a disruption in services due to same damaged cables (this link is from Network World, Inc) :
>>Breaks last week in the Flag Telecom Europe-Asia cable, owned by India’s Reliance Communications, and on the South East Asia-Middle East-West Europe 4 (SEA-ME-WE 4) cable, owned by a consortium, disrupted Internet and other communications to the Middle East and India.
Indian service providers were able to avoid a major crisis by diverting traffic from the Mediterranean routes to links in the Asia-Pacific region. Increased latency of traffic on account of the new routing however resulted in slower Internet access and poor quality of voice communications, according to the Internet Service Providers' Association of India (ISPAI).
Large Indian outsourcers, who depend on communications and the Internet for their business, said the impact on their business was marginal, as they already have enough of redundancy in their communications infrastructure. Smaller operations were however hit. Some call centers in India have privately reported frequent drops in calls from customers.<<
In spite of these comments, some Indian Companies suffered a serious problem from the outage, and Reliance might now see an added value from the implementation of Internap's IP Technology. No doubt the Internap data center business may also represent an interesting value for Reliance, too.
Akam described the event in its State of the Internet - 1Q 2008 report:
>>Perhaps the most noteworthy Internet outage in the first quarter of 2008 resulted from
several undersea cables in the Mediterranean Sea being severed. Two cables were severed
in late January, and two more went out of service in early February. These cable cuts
significantly impacted Internet connectivity into and out of countries in the Middle East.
The two cables account for the majority of international communications capacity between
Europe and the Middle East, and the cuts reduced bandwidth between the region and
Europe by 75%, according to TeleGeography.15
According to data collected by Renesys,16 Egypt, Pakistan, Kuwait, and India had the most
networks impacted by the cable cut. Data posted to the Renesys blog showed that over
1,000 customer networks in Egypt were impacted, with over 900 customer networks in
Pakistan seeing problems; nearly 500 in India and almost 300 in Kuwait.
Data collected by Akamai’s measurement systems showed the impact of these cable cuts on
network latency in the region. A visualization available at http://www.akamai.com/mideastoutage
shows the degradation in network latency between measurement points to 1.5x, 2x,
and 3x or more beyond normal average latency. Data collected by in-region measurement
agents showed that delivery of content for Akamai customers was not impacted by the
cable cuts. Akamai’s dynamic mapping system ensured that end-user requests were routed
to available edge servers, which could deliver content from cache, and Akamai’s optimized
routing technology ensured that those Akamai servers chose the fastest, most available path
when it was necessary for them to retrieve content from a customer’s origin server.<<
Reliance Globalcom Video: Global Reach and Ethernet Scalability
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1. About Reliance Globalcom 2. Synergy of recent international acquisitions 3. Market presence and service offering 4. Network architecture 5. Expansion strategy, $2 billion network upgrade and key technology partners 6. Bandwidth pricing trends per region
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