Microsoft buys Peer5 to ease Teams' network demands

Microsoft has acquired Peer5 to incorporate its enterprise content delivery network in Teams to reduce the demand that companywide video meetings place on corporate networks.

This week, Microsoft said it bought eCDN vendor Peer5 to make Teams a better option for hosting video conferences involving hundreds, or even thousands, of people. Microsoft closed the deal but did not release its terms.

When many in-office employees try to access a video stream simultaneously, it can strain a company's LAN or WAN. Peer5's eCDN uses a peer-to-peer model to ease that pressure. A few users stream the video from the internet and immediately relay that data to other employees in the corporate network. The product runs in a browser and does not require additional software.

Peer5 CEO Hadar Weiss wrote in a blog post that the company had powered live events with as many as 2 million concurrent users. Peer5, based in Palo Alto, Calif., was founded in 2012.

Peer5 was a partner of Microsoft, along with other eCDN vendors, including Hive Streaming, Kollective, Ramp and Riverbed. However, enterprise customers wanted an eCDN built into Teams, Microsoft executive Nicole Herskowitz wrote in a blog post.

"The Peer5 solution will allow Microsoft to provide a first-party offering to help customers streamline [the] purchase process and customer support," she wrote.

Microsoft will continue to support third-party eCDN providers after the acquisition. Gartner analyst Adam Preset said those firms would face the challenge of proving their offerings are superior to Microsoft's.

"Many CIOs and IT buyers are likely to prefer an end-to-end solution from a single vendor," he said.

Microsoft launched a Teams webinar feature in the spring that allowed up to 20,000 people to view a video stream. Zoom released its Events platform in July, aimed at companies hosting large virtual gatherings. Cisco purchased Socio Labs this year to enable Webex to support large-scale events with both in-person and online components.

Tom Arbuthnot, an IT architect at systems integrator Modality Systems, said Teams, Zoom and Webex have made it easier to host large meetings without hiring external firms. Bundling eCDN into Teams would remove another layer of complexity, he said.

"Suddenly, there's one less thing to buy or understand," he said.

Constellation Research analyst Dion Hinchcliffe said Zoom lacks an eCDN and may partner with or acquire a company. Webex integrates with IBM's eCDN service, he said.

Mike Gleason is a reporter covering unified communications and collaboration tools. He previously covered communities in the MetroWest region of Massachusetts for the Milford Daily News, Walpole Times, Sharon Advocate and Medfield Press. He has also worked for newspapers in central Massachusetts and southwestern Vermont and served as a local editor for Patch. He can be found on Twitter at @MGleason_TT.