Akamai Signs First Government Contracts

Five months after launching an effort to obtain federal agencies as customers, Akamai reaped the first fruits of its labors Tuesday when it revealed deals with the U.S. Census Bureau, the U.S. Government Printing Office, and the Voice of America. The contracts, which call for Akamai to deliver content delivery and streaming services, could set the table for the company to become a major beneficiary of government outsourcing.

Each of the three agencies will be doing slightly different things with Akamai's technology, which essentially caches content at the edge of its customers' networks. The Census Bureau will use Akamai's EdgeSuite service to improve site performance by reducing bandwidth needs and limiting the drain on its servers. The Government Printing Office is attempting to reduce download speeds and handle peak traffic periods, while Voice of America is primarily concerned with the streaming of 200 hours of audio and video news broadcasts each day. Financial terms of the deals were not disclosed.

Akamai formed its so-called federal initiative in January with a skeleton staff, and federal sales manager Chris Carlston, who's heading up the initiative, says the company sees government as a potentially huge vertical market. Carlston says government agencies are being asked to deliver increasing amounts of information and services over the Internet, and that Akamai has several more government contracts in the works.

Brent Bracelin, an analyst with Pacific Crest Securities, says Akamai's announcement illustrates a trend among government agencies to "buy vs. build." Bracelin says that Akamai has a long way to go to become the primary outsourcer of content-delivery services to the federal government, but that these first contracts "clearly open the door." He says the contracts also should help Akamai as it attempts to transition from the dot-com market to establishing itself as a service provider for large enterprise customers.