Digital Island to Expand with Sun, Inktomi

E-business network provider Digital
Island Inc.
Wednesday sealed a $150 million, three-year
deal with Sun Microsystems
and Inktomi Corp. to
accelerate Web site performance for consumer and business Web sites.

Both Sun (SUNW)
and Inktomi (INKT)
will make unspecified minority investments in Digital Island (ISLD). Inktomi already has a stake in Sandpiper Networks, which agreed to merge
with Digital Island in October.

Digital Island will deploy up to 5,000 Sun servers equipped with Inktomi’s
Traffic Server and content delivery suite. The network currently consists
of regionally located data centers, more than 1,200 Sun- and Inktomi-based
content distribution sites, and an intelligent network spanning 21
countries — all designed to provide a superior interactive experience
anywhere in the world.

Over the next three years, the companies will add up to 5,000 of Sun’s
Netra servers and Enterprise 420R servers running the Solaris operating system. The servers will be running the Inktomi
Traffic Server network cache platform and content delivery suite. These
products will be incorporated into Digital Island’s existing network of
1,200 carrier-grade servers running Sandpiper’s Footprint algorithm, which
transparently directs end users to the best performing site on the network.

The companies will target network service providers worldwide for
co-location of the new servers through joint marketing and channel
programs. These servers will support interactive services over a variety of
access methods including Digital Subscriber Line, cable, wireless and dialup.

“Inktomi’s expanded strategic agreement with Digital Island represents an
important advance in our mission
to scale the Internet, and further establishes Traffic Server as the de
facto network cache standard,” said
David Peterschmidt, president and CEO of Inktomi.

“The combination of Sun’s
powerful servers, Digital
Island’s sophisticated global network, and Inktomi’s infrastructure
software creates an incredible platform to
help businesses aggressively leverage the Internet.”

Benefits to NSPs of co-locating the servers include:

  • Reduced network backbone and peering costs by keeping content on their

  • Increased attraction and retention of new subscribers through faster
    and more reliable end-user experience. In part, the performance gains
    are realized through the elimination of network bottlenecks and closer
    proximity of content to the end users

  • Increased revenue generation through participation in Digital Island’s
    innovative revenue sharing and resale programs

  • Additional revenues through building value-added content delivery
    services such as rich streaming media, ad insertion, mobile device
    support, secure e-Business transactions and dynamic content, by leveraging the open Application Programming Interface (API) and related software development tools for managing applications distributed on the
    e-Business Content Delivery Network

Due to the deal, midday trading saw shares in Digital Island soaring 54-13/16 to 124-7/16 on the Nasdaq stock market.

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