How to tell when a CDN has arrived: Akamai sues them for patent infringement.

The lawsuit that Akamai has filed against Cotendo alleges the violation of three patents.

The most recent of the patents, 7,693,959, is dated April 2010, but it’s a continuation of several previous applications — its age is nicely demonstrated by things like its reference to the Netscape Navigator browser and references to ADC vendors that ceased to exist years ago. It seems to be a sort of generic basic CDN patent, but it governs the use of replication to distribute objects, not just caching.

The second Akamai patent, 7,293,093, essentially covers the “whole site delivery” technique.

The oldest of the patents, 6,820,133, was obtained by Akamai when it acquired Netli. It essentially covers the basic ADN technique of optimized communication between two server nodes in a network. I don’t know how defensible this patent is; there are similar ones held by a variety of ADC and WOC vendors who use such techniques.

My expectation is that the patent issues won’t affect the CDN market in any significant way, and the lawsuit is likely to drag on forever. Fighting the lawsuit will cost money, but Cotendo has deep-pocketed backers in Sequoia and Benchmark. It will obviously fuel speculation that Akamai will try to buy them, but I don’t think that it’s going to be a simple way to eliminate competition in this market, especially given what I’ve seen of the roadmaps of other competitors (under NDA). Dynamic acceleration is too compelling to stay a monopoly (and incidentally, the ex-Netli executives are now free of their competitive lock-up), and the only reason it’s taken this long to arrive was that most CDNs were focused on the huge, and technically far easier, opportunity in video delivery.

It’s an interesting signal that Akamai takes Cotendo seriously as a competitor, though. In my opinion, they should; since early this year, I’ve regularly seen Cotendo as a bidder in the deals that I look at. The AT&T deal is just a sweetener — and since AT&T will apply your corporate enteprise discount to a Cotendo deal, that means that I’ve got enterprise clients who sometimes look at 70% discounts on top of an already less-expensive price quote. And Akamai’s problem is that Cotendo isn’t just, as Akamai alleges in its lawsuit, a low-cost competitor; Cotendo is trying to innovate and offer things that Akamai doesn’t have.

Competition is good for the market, and it’s good for customers.