New CDN Cotendo Intros Dynamic Site Acceleration Service

Written by Ryan Lawler

Wednesday, March 11. 2009 at 00:01 AM EDT Post a comment

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After about a year of operating in stealth mode, content delivery network (CDN) startup Cotendo Inc. is formally launching its product offerings today, with services designed to target mid-market content providers. The company is also announcing a Series B funding round led by Benchmark Capital .

In the lead-up to its service launch, Cotendo raised $7 million in its second funding round. In addition to Benchmark, Cotendo received funds from Sequoia Capital , which led its first funding round in January 2008.

At first glance, Cotendo doesn't seem to have a whole lot going for it. The company doesn't have any infrastructure of streaming video, nor does it seem to have any plans to roll out streaming services anytime soon.

So while other providers are clamoring all over each other to serve large media conglomerates with live and on-demand streaming products, Contendo's core service offering is based on HTTP delivery of static objects like images and HTML files. [Ed. note: Booo-ring!]

But what Cotendo does have going for it is a focus on an underserved part of the market, and some dynamic site acceleration technology that could help it stand out from the pack.

The company is launching its services with an eye on mid-tier customers that CEO Ronni Zehavi says aren't served well by the current incumbents of the CDN space. But the company is not just looking to build its business on positioning.

While Cotendo does seek to serve a portion of the market that's not getting a lot of love from the big players, Cotendo also has some patent-pending technology that could even put it in competition with Akamai for certain sets of customers.

"There's a reason why [Cotendo] decided not to focus on video," Zehavi says. "We believe that as a software company, there are a number of other factors where we can create differentiation between us and the rest of the marketplace."

That differentiation comes in the form of dynamic site acceleration technology that will allow enterprises to speed up Web applications and other non-cacheable site content. While most CDNs cater at least somewhat to the enterprise market, Akamai is the clear leader in the market for dynamic site acceleration.

"There are a lot of customers that want those services, but don't want to pay Akamai prices for them," says Gartner analyst Lydia Leong.

Leong says the ability to offer a product that only one other player offers could help create a sustainable business for Cotendo -- or it could help them to get acquired by another CDN player looking to offer dynamic site acceleration.

"If it works, someone's going to buy them next year. Everyone out there is either building this product or wants this product," Leong says. "Even if they don't get acquired, there's always room for another competitor on that product."

In addition to dynamic site acceleration, Cotendo is also offering a "CDN balancer," which will allow publishers to use multiple CDNs and manage the traffic flows between them. Advanced DNS services and a reporting and analytics suite are also part of Cotendo's product offering.