What if you could make bandwidth near free for $6.62 million?

3Crowd blog post:

>>At 3Crowd, we just received a $6.62 million venture investment from our partners at Storm Ventures and Canaan Partners. With that investment (and maybe some more later) and a lot of hard work, we plan to execute this vision: we think we can change the economics of the content delivery systems and make widespread distribution of video more financially feasible. And we think we can make a substantive and positive impact on Internet along the way. If we can help provide tools and subsystems that can enable “the crowd” to harness resources in a new way, we may be able one day to realize a content economy where bandwidth is no longer a restrictive line item on businesses’ operating budgets. If we do our job right, scalable and affordable data delivery will no longer be a pipe dream.

Must read from Data Center Knowledge:

Is Google’s Network Morphing Into a CDN?

March 18th, 2010 : Rich Miller

A chart from Arbor Networks showing the growing use of peering by Google.

Google has dramatically increased its use of peering over the past year, and has also accelerated deployment of local caching servers at large ISPs, making the company’s network resemble a content distribution network (CDN) such as Akamai.

3Crowd joins growing list of CDN managers

fromTier 1 Research daily newsletter:

Joining a growing list of CDN managers is startup 3Crowd Technologies. In essence, the firm's technology is aiming to help CDN customers steer traffic across different CDNs. The startup was founded by Barrett Lyon, the co-founder of CDN vendor BitGravity, who left that project last year under odd circumstances.

Welcome CrowdMonitor and CrowdDirector

Welcome CrowdMonitor and CrowdDirector

At 3Crowd have been working furiously over the last month on the development of our first two services. The whole team has been dedicated to delivering on our mission of helping companies reduce costs, deliver, and scale their network applications through a healthy ecosystem for data delivery.

With our first services – CrowdMonitor and CrowdDirector, we’re giving the world just a tiny view of the foundation we’re building to enable a new type of Content Delivery System. We are using the idea of a crowd or crowd-sourcing to leverage multiple CDNs that can be monitored, managed and deployed as one single service.

CDNs have been an integral part of the vitality of video on the Net, but we think they are starving the next generation of innovation. The natural evolution of this marketplace has favored the content distributors but the market needs to continue its evolution into a more balanced relationship.

CrowdMonitor and CrowdDirector will give content owners the power to know what’s happening with their content and the tools to dynamically manage their assets. They will have significant implications on performance, vendor flexibility and costs and not only impact the business of current content providers, but also re-orient the economics and invite a new generation of providers to participate in the market.

We have been thoughtful about how we are creating this ecosystem and have been working on it for a while. If we do our job right, Internet streaming will be more affordable than traditional broadcast systems and together will have success.

Streaming Media West and Online Video Platform Summit - Special Edition News Round Up

from Larry Kless' blog:

It was a busy news week with major announcements from companies participating in Streaming Media West and the Online Video Platform Summit.

...

Over 30 companies in the online video platform category participated in the show as either speakers, event sponsors or exhibitors, and many others came to see what was going on. The OVP space has evolved over a short time and has moved up the stack as a SaaS (software as a service) offering eclipsing CDNs which just a few months ago saw their own summit at Streaming Media West. Ben Homer, who I was glad to finally to meet at the show, pointed this out in his post, SMW Closing Thoughts | Online Video Watch,

"CDNs were noticeably missing from the event floor. There were a few, Internap was there, but Neither Akamai or Limelight had a booth this year. Several years ago CDNs were everywhere you looked at Streaming Media shows. Now it’s platforms."

More Viewpoints On What’s Next for CDNs

I’d like to add my comments to Rob’s article “So the recession is indeed punishing CDNs.” After all these companies, both pure plays and telecoms, reported 2Q results and issued weak guidance for Q3, it’s quite clear that the sector is experiencing little to no revenue growth and expecting this trend to last in the close future.

Dan Rayburn is taking a longer time frame approach in his article: “The Future of the CDN Market”, to see what this can mean for the whole sector:

As we look to what the CDN market will be like 12 months from now, it’s clear that many vendors won’t be able to sustain themselves. The fact is, the CDN industry has been through this cycle before. In 2000, about 50 CDNs of all shapes and sizes existed. Two years later, in 2002, there were only about a dozen CDNs; in 2004, that number was only five or six.

link to the article available at Telecom Rumblings...

Carriers, standalone CDNs squeeze one another

from telephonyonline.com:

>>Telecom carriers are beginning to radically shake up the market for content delivery networking (CDN) now crowded with standalone players, according to Yankee Group senior analyst David Vorhaus, who predicts the current pricing pressure in the CDN sector will accelerate carrier participation in the space, either through acquisitions or partnerships they may or may not be preludes to acquisition.

...

In a recent assessment of CDN players, the Yankee Group already ranked AT&T (NYSE: T) and Level 3 Communications (NASDAQ: LVLT) in fourth and fifth place, respectively, in terms of the quality of their offerings. But in talking about carrier participation in the CDN space today, Vorhaus said, “What we’ve seen thus far is only the tip of the iceberg.”

Carriers are inexorably moving into the CDN space not just because it’s becoming an increasingly vital part of their business but because they have certain innate competitive advantages there. During the company’s second-quarter earnings call, Level 3 executives, while reporting pricing pressure in their CDN business, argued that it will be remedied eventually by the cost structure they enjoy as a carrier. Jim Crowe, the company’s chief executive officer, emphasized the advantage that carriers wield over standalone CDNs simply by owning their own underlying transport infrastructure. “Over time, if you're not a carrier with your own low-cost source of bandwidth, you're going to end up as a reseller,” Crowe said. “Resellers can grow to a certain size, but then because they don't control such a large portion of their cost, they get squeezed.”

Vorhaus agreed in general that CDNs have already begun to squeeze. CDN market leader Akamai Technologies has significantly dropped its typically premium prices lately for existing big-name customers, something Crowe hinted at in the earnings call as a tactic of incumbents trying to keep their market share. And Akamai’s biggest competitor, Limelight Technologies, which reported sequentially flat second-quarter revenue, is expecting third-quarter revenue to be sequentially flat as well.

AccuStream Research: CDN Account Growth at 23.3% in 2009, Revenue up by 16.4%

SALINAS, Calif.--(BUSINESS WIRE)--CDNs (Content Delivery Networks) are achieving another year of double-digit growth in 2009, writing new contracts at a 23.3% pace above 2008, powering top line revenue forecasts up 16.4% to $1.37 billion across the segment.

The U.S. market currently generates an estimated 55.8% of the global CDN total, though international traffic is now increasing at a faster rate than its domestic counterpart, according to an industry report by AccuStream Research.

The report, CDN 2010: Revenue, R & D, Cap Ex and Operational Analytics provides comprehensive market performance metrics for each CDN, including MRR, total accounts, revenue, servers, cap ex, R & D initiatives, share of and penetration into video content verticals (pro video views by site and category), video advertising, Internet radio and UGV.

...

Of the 22.5 billion professional video views served in 2009, Akamai delivered 31.9%, Limelight Networks 12% and Level 3 11.2%.

CDN Business May Get Worse Before It Gets Better, Further Details On Pricing

from Dan Rayburn:

>>With Limelight reporting earnings last night, it's now clear that the major players in the CDN space, the vendors that control the vast majority of the market share for video delivery, are all experiencing no growth. Akamai's M&E business was down and Limelight, Internap and Level 3 all reported no revenue growth for their CDN business. And with Q3 typically being a weak quarter for the CDNs and some of them setting guidance that shows no growth over Q2, we may have yet to see the bottom.

Limelight Networks comments on CDN pricing

from LLNW conference call, transcripts by Seeking Alpha (emphasis added):

• David Hilal - FBR Capital Markets
• Okay and on pricing, Jeff, your comment on aggressive pricing or it is pretty comparable to what Akamai had said last week and I do no think it is probably a surprise to anybody at least in common sector but maybe you can talk to us about the pace of that aggressive pricing and I mean pricing war sometimes can last a long time and sometimes can be short and you obviously need to manage your business based on how you forecast that. So, when you think add over the next year or so, do you think the pricing environment stays equally tough or starts to improve or could possibly get worse from what you have seen recently?
• Jeffrey Lunsford
• Sure, so let us give you some historical context here. So, three years ago, we were modeling about 20% to 25% annual unit price decline and about a year ago, we started looking at and talking to investors about probably you should model 25% to 30% annual price decline. What we saw in Q2 was in between 30% and 35% so if you want to be conservative, you would model a 30% to 35% going forward.
• If you look back over a decade, that is much more rapid price decline than the industry has historically had and so, we do think that that will improve. We think we should return back to 25% to 30% and then ultimately back to 20% to 25% per year and we think there is two root causes for the compression going to this level.
• Number one, the business environment, the economy customers are putting dramatic pressure on all of their vendors, CDNs included. Number two, which we have talked about in the past is that large telcos that began to offer CDN services are able to get paid when they deliver those bits on the ISP side and so to try to establish themselves in the business, they will subsidize CDN with other big delivery services. The effect of that second one, the entrance of the telcos into the market, we believe has now being felt and absorbed by the industry and so we believe that from here forward, we should be looking at a more return to normal.
• What happened is that has caused a shakeout effectively. It is no secret that there are many smaller companies that were trying to make a run at the CDN sector have given up, shutdown or sold for $0.20 on a $1 and we now have a market that as I said earlier is solidifying around two or three market leaders. So, while at short term pain, we believe there will be a long term benefit and that this is a business that requires global scale and the analogy that we used is the package delivery business where you have that actual GPS and DHO and if you are going to build a global infrastructure to deliver anything where there is packages or bits, you only need two or three platforms.
• And so with the way of a traffic that continues to grow and with the complexity of all the new devices people are accessing content with, we think that those two or three global platforms will going to have an amazing opportunity and an amazing amount of work ahead of them and so the shakeout when you look back a couple of years from now while short term painful, you will look back and say, "Well, I was a good there winning in shakeout and the markets are now really healthy around these two or three platforms."

A closer look at some Akamai data

Rob Powell, at Telecom Rumblings, was kind enough to publish a small article about Akamai:

>>A closer look at some Akamai data

Level 3 comments on CDN and IP

some selected comments from Level 3 about CDN and IP services, from Seeking Alpha transcripts:

>>Pricing pressure for IP and CDN services also negatively affected the Content Markets group.

We also saw continued growth from our content customers in Europe, both from our CDN services and our newly launched European divx video transport products. For the full year, we expect to see year-over-year growth at a more moderate rate than in recent years given the economic pressures within the region.

Turning to pricing and demand, as I mentioned previously fundamental demand continues to grow from many of our data services like IP, CDN, metro transport and wavelength services. However, pricing pressures have increased recently for IP services.

Now we're on record, as having said that we've seen no reason to see any different CDN continues to grow. I might add in Europe in particular it continues to grow. We have seen some additional pricing pressure, I think from fair play CDN providers who might be trying to hold on to market share. But we think in the longer term, what we have said repeatedly is what we'll continue to say is going to become a large object, going to become a carrier business, going to become the bread and butter of providing IP and other forms of IP optical services to a broad range of the market

Level 3 Appeals Patent Ruling In Favor Of Limelight

from law360.com:

Level 3 Communications LLC has appealed a January judgment in favor of Limelight Networks Inc. in the ongoing patent dispute between the two companies related to Internet content delivery network technology.

Akamai to Appeal Decision in Patent Litigation Case

we'll see how the market will react on Monday...

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Akamai Technologies, Inc. today announced that it intends to appeal a decision by the judge presiding over its patent infringement suit against Limelight Networks, Inc. in the U.S. District Court of Massachusetts. The decision, released today, granted a Limelight motion challenging a prior jury finding of infringement, based on new case law.

Highwinds: what path for CDN growth?

from Tier 1 Research daily newsletter:

>>Highwinds Network Group is a profitable company that expects to grow revenue by 17% this year. So why did it cut staff in its CDN operations? Because while growth in the CDN business is still strong, the company's profit comes from other operations, including Usenet software, IP transit and colocation.

Wall Street Journal - Limelight Network

from Seeking Alpha Market Current:

>>Wall Street Journal (NWS), one of web video provider Brightcove's flagship clients, is now plugging directly into Limelight Networks (LLNW) content delivery network, Silicon Alley Insider discovers.

CDNetworks Acquires Panther Express To Speed Expansion In The U.S.

from Dan Rayburn's BusinessOfVideo blog:

>>For me, there are a couple of key take away points from this deal. To almost any other CDN, Panther Express would not be a good acquisition since they are not global, only provide HTTP delivery, have no applications and are still relatively small revenue wise. CDNetworks is probably the one company where this does make sense since both company's strengths help equal out their weaknesses. Since Panther's services are very basic, the integration of Panther's infrastructure under the CDNetworks umbrella should be pretty straightforward. Unlike what we saw with the VitalStream and Internap integration, CDNetworks does not need to migrate any applications, streaming servers or customers broadcasting live content. While CDNetworks does not appear to be in any hurry to integrate, and does not need to be, it should be pretty simple when the time comes.

BT Plans to Enter CDN Industry by Year's End

from Dan Rayburn's BusinessOfVideo blog:

>>Based on an interview they did this week with Informa Telecoms & Media, BT said that, "We believe that we can build our own CDN as effectively as reselling others solutions." While this built it yourself approach by BT does not surprise me, unless BT only wants to have a regional CDN footprint, I think it's the wrong approach. It is possible that BT may just focus on building out a European based CDN which would be a lot easier for them than trying to deploy a CDN with a global footprint. But if they want to service content owners who need delivery to all regions of the world, BT is going to have a really hard time playing catch up in the market. You can't just throw a bunch of money at the problem. It takes a lot more than deploying lots of boxes to have a real CDN offering in the marketplace.

CDNetworks merges US ops with Panther Express

from Tier 1 Research daily newsletter:

>>The consolidation that T1R has long anticipated is starting, in a modest way. Korea-based CDNetworks will merge the operation of its independent US subsidiary with the operations of US-based CDN vendor Panther Express. The terms of the deal were not disclosed.

another CDN player...

DEUTSCHE TELEKOM ICSS AND EDGECAST NETWORKS PARTNER TO LAUNCH INNOVATIVE CONTENT DELIVERY SOLUTION (CDS) TO PROVIDE CUSTOMERS WITH BEST-IN-CLASS CONTENT DELIVERY EXPERIENCE

LOS ANGELES, CA AND BONN, GERMANY– January 26, 2009 — EdgeCast Networks, the superior, cost-effective rich media content delivery network (CDN), and Deutsche Telekom ICSS, the international wholesale division of Deutsche Telekom (NYSE:DT), today announced the launch of a new innovative content delivery solution.

Targeted to fulfill the needs of premium video, audio and content publishers, gaming companies, advertisers or service or hosting providers, ICSS's Global Content Delivery Solution improves the performance of both live and on-demand content delivery via the Internet. The CDS solutions support streaming video delivery for live and on-demand content (including HD) as well as web content acceleration for ensuring fast page load times for high availability web sites.


Rob Powel has an interesting article on this:

DT Enters the CDN Game

Company Information
Company Name	EdgeCast Networks
Also Known As
Company Website	http://www.edgecast.com
Primary ASN	15133
IRR Record
Network Type	Content
Approx Prefixes	30
Traffic Levels	Not Disclosed
Traffic Ratios	Mostly Outbound
Geographic Scope	Global

Public Peering Exchange Points
Exchange Point Name	ASN	IP Address	Mbit/sec
Any2 LAX and SJC	15133		1000
PAIX Atlanta	15133		1000
PAIX Dallas	15133		1000
PAIX Seattle	15133		1000
PIPE Networks Sydney	15133		1000

Private Peering Facilities
Facility Name	ASN	City	Country	SONET	Ethr	ATM
Equinix Ashburn (DC1-DC4)	14210	Ashburn	US
Equinix Chicago (CH1/CH2)	15133	Chicago	US
Equinix Dallas (DA1)	15133	Dallas	US
Equinix San Jose (SV1)	14153	San Jose	US
MEGA iAdvantage Hong Kong	15133	Hong Kong	HK
NIKHEF Amsterdam	15133	Amsterdam	NL
One Wilshire Los Angeles	15133	Los Angeles	US
TelecityGroup Frankfurt (Gutleutstrasse)	15133	Frankfurt	DE
TelecityGroup London (Harbour Exchange)	15133	London	UK
Westin Building Seattle	15133	Seattle	US