Service providers need a new approach.

The business of distributing content on the Web is in transition. Standalone content distribution networks (CDNs) still predominate, but telecommunications service providers that traditionally relied upon CDNs have begun to enter this market themselves. Leveraging their own infrastructure, they aim to capture new revenue, reduce dependencies and improve quality of service.

Conrad ClemsonCommon challenges face any player in this space. CDN customers have more content to propagate with higher expectations of service quality than ever before. For CDNs, this translates into increased traffic and complexity. At the same time, the rise of service provider CDNs underscores another challenge: inter-CDN connections.

Service providers need a new approach – and new tools – to meet the challenges of the changing content delivery landscape.

The history of service provider CDNs (i.e., CDNs that are on a service provider’s network) goes back a few years. Stung by the collapse of transit prices in the mid-2000s, many service providers moved into the value-added CDN market, which offered the prospect of not only reducing costs and expanding revenues, but also improving QoS by moving caches closer to end users. Wholesale telecommunications provider Level 3 entered the space after acquiring the CDN assets of Savvis in 2006. Many others have followed since then, including Global Crossing, Verizon, Virgin Media and AT&T.

Today, the CDN sector is strong. Total global revenue stands at $2.7 billion, with improved gross margins and double-digit top line increases forecast through 2012, according to AccuStream Research. Led by players such as Akamai and Limelight Networks, the market could expand further, especially if service providers continue to assume the role of CDNs. Whereas a status-quo approach to CDNs (led by pure-play providers) will lead to a $6 billion market by 2015, and Cisco predicts that the market could grow twice as large if it gets a push from service provider CDNs.

Content, especially video, is the underlying driver for this market. Cisco’s widely circulated prediction is that video will exceed 91 percent of all global consumer Internet traffic by 2014. Meanwhile, Forrester Research is predicting that by 2015, up to 25 percent of all video minutes will be delivered over the Internet. For data-centric CDNs not optimized for video, those trends are a problem.

CDN customers are pushing more live-streamed and on-demand video, but also more Web pages, music, software, applications and other content with higher expectations of quality than ever before. End users, meanwhile, are pulling this content toward an increasingly wide range of CE devices. Millions of users also produce content themselves. For CDN and service providers, those trends are translating into a number of challenges:

  • Higher volumes of content (from large video files to small objects)
  • Greater demands for storage and lowlatency streaming
  • Numerous end-device requirements (file format, DRM, resolution)
  • More policies to implement (geo-location, IP restriction, business rules)
  • Fluid consumption patterns and network conditions
  • Multiple network types (public, private, virtual private, wireless)
  • Threats to security, given greater ingress points

Service providers and CDNs that are looking to implement a federated CDN structure face additional challenges and choices. CDN brokering requires technology that can handle several key management functions, including:

  • Inter-CDN service-level agreements (SLAs)
  • Content resolution and redirection
  • Transactional accounting and reporting

Given these trends, it is clear that a new approach to delivering content is needed. The focus must shift from data movement to service delivery, with attendant attention to business rules and policies.

A service-focused, open CDN management platform independent of the delivery elements can help service providers meet the challenges facing them today. These platforms must be lifecycle managementbased and enterprise-class so they can meet the challenges of scale, complexity and openness facing many service providers and provide the benefits of revenue capture, reduced dependencies and QoS/QoE that customers today specify and end users expect. They must also be able to accommodate new CDN models, work with any CDN network elements and focus on service delivery rather than data movement.

It is clear that the new breed of service provider-based CDNs are changing the content delivery landscape. The right set of tools will enable them to capture revenue controlled by incumbent pure-play providers, reduce operational costs, and deliver quality and value to customers and end users.


Next month’s column will be written by Suddenlink CTO Terry Cordova.