Internet Solutions (IS) - subsidiary of Dimension Data - has increased its audio and video streaming capabilities after buying a majority stake in Antfarm, for an undisclosed amount.
The acquisition of what IS says is a "significant" stake in the content delivery company builds on its previous partnership with Antfarm. The group did not disclose the exact size of the stake it has bought.
Greg Montjoie, executive of connectivity and carrier at IS, says the strategic deal is necessary as content traffic is increasing. He also aims to spread the offering further through the continent, making use of its current network.
Montjoie says the companies have a long history partnering in providing audio and video streaming. He notes the corporate market uses corporate videos to train and communicate with staff, and this will form a large part of network traffic in the next few years. "Streaming media services, particularly video content, are growing at double digit growth rates, both in the consumer and business space."
Cisco's Visual Networking Index 2013 predicts there will be nearly two billion Internet video users globally, excluding mobile-only, by 2017, up from one billion Internet video users in 2012.
Video is set to account for 58% of all business-related Internet traffic in 2017, up from 31% in 2012, says Cisco. The index also states business Internet video traffic will experience a 5.3-fold increase from 2012 to 2017, with content delivery networks set to carry over half of total Internet traffic by 2017.
Growth push
Montjoie says Antfarm plays in a niche space as it captures, distributes and codes video, which few companies do. He says it makes sense to couple this ability with IS's infrastructure as the video service, which it is already offering, will grow "from strength to strength".
"With this kind of exponential growth forecast, a strategic acquisition of this nature was necessary to gain a significant advantage in the local industry," says Montjoie. "Given the direction and speed at which the market is moving, both companies felt we could achieve more through an acquisition than merely maintaining the status quo in our established working relationship."
Montjoie says the deal is a long-term play, although IS has already started realising the benefits. He says the group has the potential to leverage off Dimension Data's parent company - NTT - which has a vast network.
IS has an African content strategy and wants to take the offering to East and West Africa, Montjoie adds. Andrew Aitken, sales and marketing director at Antfarm, explains the deal allows Antfarm to expand aggressively by leveraging IS's cloud and network infrastructure.
"The ability to leverage IS's significant cloud infrastructure and its established MPLS VPN network to distribute recorded content on-demand adds significant value to our eco-system, and significantly boosts our reach, both locally and globally, especially into Africa. As a rapidly growing company, it would take us a lot longer to achieve this scale of growth organically, so the acquisition will enable us to accelerate our growth strategy exponentially."
Antfarm's brand, operations, structure, management and staff will remain unchanged following the acquisition, and the company will continue to serve its current customers from its Pretoria head office.
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