Digital Island Teams With Compaq, Intel and Microsoft to Build World's Largest Streaming Media Network

Business Wire, June 20, 2000

Business/Technology Editors

SAN FRANCISCO--(BUSINESS WIRE)--June 20, 2000

Broadcast-Scale Delivery by Digital Island to 7.5 Million

Simultaneous Global Viewers Supported by Equity Investment from

Compaq, Intel and Microsoft

Digital Island, Inc., a leading Global e-Business Delivery Network, today announced that it is working with Compaq Computer Corporation, Intel Corporation and Microsoft Corporation to extend its infrastructure to provide broadcast-scale streaming media - up to 7.5 million simultaneous media streams - for the first time over the Internet.

The scope of this streaming network, roughly comparable to a prime-time TV program's reach and an order of magnitude larger than any previously announced streaming network, is expected to accelerate the market opportunity for entertainment and other companies, such as financial services and publishing firms, using rich media for Web-based customer transactions. The global market for streaming media content delivery will rapidly grow from $78 million in 2000 to $2.5 billion by 2004, according to Jupiter Communications.

"This relationship is creating a win-win solution in deploying a streaming network capable of delivering 7.5 million simultaneous streams. Digital Island is poised to take advantage of the rapidly growing streaming market," said Greg Howard, principal analyst of the High-Tech Resource Consulting Group, LLC.

The infrastructure expansion over the next two years is expected to greatly increase the streaming and transactional capacity of Digital Island's high-performance e-Business Delivery Network, which offers an integrated suite of hosting, network, content delivery and application services for companies engaged in interactive e-Business.

Compaq, Intel and Microsoft have agreed to make a combined equity investment of $45 million in Digital Island to support its infrastructure development. Specific terms of the investment are not being disclosed.

In addition, Compaq Financial Services (CFS) will provide $50 million in equipment lease financing to Digital Island, to expedite their worldwide deployment of Compaq servers. This financing support will continue as Digital Island expands into more than 25 countries in North America, Europe and Asia. CFS will also extend up to $50 million in lease financing to qualified Digital Island customers.

Digital Island has standardized on Intel architecture-based Compaq ProLiant servers as its scalable global platform for Microsoft(R) Windows Media(TM) Services running on Windows(R) 2000. Digital Island has committed to deploy up to 8,000 Intel architecture-based Compaq servers worldwide, including the new ultra-dense ProLiant DL360 servers built on Intel's Pentium(R) III processor. Digital Island has committed to deploy these servers in its e-Business Delivery Network, integrating regional data-center hosting with network-edge computing that locates streaming content close to the end user for the best possible streaming quality. Digital Island's e-Business Delivery Network is powered by the company's Footprint(TM) content delivery service, which employs the company's break-through Best Distributor Selection technology to guarantee content is served from the optimal location.

Digital Island's expanded streaming media infrastructure will support Windows Media. Coupled with integrated digital rights protection for streaming and downloadable content and superior audio and video quality, Windows Media Services provides the capacity for up to 9,000 concurrent streams on a single server. The network will be powered by Windows 2000 Server, which provides an industrial-strength platform with the manageability, scalability and availability required by the most demanding applications.

"Streaming media is an intricate part of our global sales strategy, allowing us to interact with customers in more than 160 countries through a rich end-user experience," said Michael J. Cohen, President of National Accounts and Senior Vice President at AIG. "The relationship between Digital Island, Compaq, Intel and Microsoft to build the world's largest streaming media architecture will be an enormous catalyst for expanding our business across the globe."

A Digital Island customer, AIG is the leading U.S.-based insurance and financial service and the largest underwriter of commercial and industrial insurance in the United States.

"The Internet is all about interactivity and e-Business is about the end-user experience," said Ruann F. Ernst, Chairman and CEO of Digital Island. "Users want the most compelling interactions, which means rich media must be a part of the experience. This powerhouse combination of Compaq, Intel and Microsoft working with Digital Island will remove the barriers to using rich media to reach broadcast-scale audiences with full transactional capabilities - adding an entirely new dimension to e-Business around the world."

"Compaq is committed to enabling leading Service Providers such as Digital Island to pave the way to emerging applications and markets," said Keith McAuliffe, Compaq Vice President and General Manager, Service Provider Business Unit. "We are pleased to extend our partnership with Digital Island and work with them to enable the best Internet infrastructure, using Compaq's industry-leading ProLiant servers at the edge, to improve streaming media capabilities."