An Inside Look At How PacketZoom Is Accelerating Performance In China’s 1.3B Mobile User Market

In the summer of 2016, Shlomi Gian made the decision to leave the comfort of corporate America giant Akamai and join 3-year old startup PacketZoom as their CEO. Shlomi was not sure how “David” could compete with the industry “Goliaths” in selling this new in-app networking solution that challenged the fundamental axioms the performance market has been trained to follow for years. After all, everyone knows that the world has gone mobile but too many of us have accepted the fact that the mobile experience will always lag far behind the desktop experience. Many people believed that not much could be done to address the problem since the industry was widely adopting old web solutions in the failed attempt to resolve the mobile challenge.

A few weeks after joining PacketZoom, Shlomi and the team realized there’s a smarter way to way to settle this dispute: “David” can utilize his innovative edge to enhance “Goliaths” power so everyone wins. Luckily, PacketZoom’s Mobile Expresslane was designed to be CDN agnostic, and there was no direct integration between the two. That helped address an important market decision the company made in the early days deciding that PacketZoom’s solution will enhance CDNs and not replace them. The idea of joining forces with the big guys was seeded and the obvious partners became the dozen web CDN vendors. Many of them had already started expressing frustration with the limitation of traditional CDN services in a mobile-first world and had been searching for smart, breakthrough technologies to resolve the mobile performance challenge. The market was ready to take the leap and start providing mobile app devops with a one stop shop for their mobile app performance needs.

Much had been said about the Chinese market and the speed in which the country is developing. With 430 million devices shipped last year, the Chinese mobile is the biggest smartphone market on the planet, and with $5.5B in game revenue, the Chinese mobile gaming industry is surely one to watch. The less discussed topic is the state of the Chinese mobile networks. While LTE is being deployed everywhere, it seems like the size and population density is challenging  even the latest telecommunication technology. Based on PacketZoom Mobile Observatory, China suffers from 9.2% transfer failure rate (similar to Malaysia, India and Brazil), and a high packet loss.  These two parameters have severe impact on content download time and overall performance.

Late last year, an initial and infrequent conversation between PacketZoom and ChinaCache started to formalize. The idea of partnering with China’s leading CDN, and leveraging its size and expertise to penetrate the Chinese market made perfect sense. PacketZoom, a hungry, fast-growing start-up with a vision to “offer technology that sets the standard for mobile app performance worldwide, simply and reliably“, could change the standard of mobile performance in China. Initial testing indicated that PacketZoom’s Mobile Expresslane, running in ChinaCache data centers in mainland reduced latency by 3x on average, which meant a significant improvement in both static content download, as well as API access time and failure rate. The combined solution worked flawlessly and was ready to sell into the market.

Earlier this month ChinaCache and PacketZoom completed their contract and PacketZoom’s Mobile Expresslane will now be operated and sold exclusively in the Chinese market by ChinaCache. This will be the first time that I know of that mobile content delivery is optimized in all three miles in a production environment and based on early results the companies are seeing, expectations are pretty high.

Updating Enterprise Video Platforms Study: Looking To Speak To Vendors

Frost & Sullivan is currently working on an update to our Enterprise Video Platforms study and is looking to speak to vendors focused on the space. The report will focus on the use of video solutions for enterprise communications and will examine key market drivers and restraints, identify business and technology trends, and publish global market revenues. We are currently in the process of doing briefings with vendors in this market. If you play in this space, please reach out to Frost & Sullivan Industry Analyst, Anisha Vinny to schedule a call.

NYC Streaming Meetup Tuesday Night, 6pm

554821_327218634021249_880501208_nThe next streaming media meetup in NYC will take place on Tuesday, February 28th, starting at 6pm at Tavern 29, located at on 29th street and Park. We will be on the second floor and they do ask for ID at the door. There is no RSVP list, just show up, bring a friend and spread the word! We will have open bar thanks to sponsors Level 3, Haivision and Cedexis. 🍺 🍸🍷

I’ll keep organizing these every month so if you want to be notified via email when the next one is taking place, send me an email and I’ll add you to the list.

Telstra Owned Ooyala Lays Off 14%, Will Re-Invest and Rehire Outside Of OVP Business Line

ooyalaTelstra owned online video platform provider Ooyala, laid off 14% of their workforce, or about 70 employees on Tuesday. This news comes from a memo that was shared with me that was sent to all Ooyala employees announcing the changes. While having to let people go is never good, in this case Ooyala is using the layoffs to re-focus their business. The company plans to re-hire about 7% new employees and will re-invest in their sales and operations groups, specifically for products outside of their OVP product line.

Since Ooyala was acquired by Telstra, the company has invested significantly in R&D for their online video product and will continue to be in that market. Ooyala is not exiting or shifting away from their core OVP business, but rather right-sizing their investment to ensure an equal level of resourcing across all three of their business lines. A big part of the company’s focus is now on selling an integrated suite of products that deliver personalized cloud TV, specifically their Ooyala Flex and Ooyala Pulse products. As a result, the company said in the internal letter that they, “had to reduce the number of jobs in our core OVP R&D organization to open jobs that will fuel growth in our new lines of business.”

Ooyala definitely got a bit too big when it came to the number of employees they had working on their OVP product line and re-focusing the business is a smart move on their part. The online video platform market is not as big as some think which Ooyala’s acknowledges in their memo saying the market is “becoming more commoditized by the number of competitors and large enterprises entering the business“. So making sure their workforce and investments are equal across all of their services, and realigning their workforce around that is a necessary step.

The company has never discussed revenue numbers but in a call I had last year with a Telstra executive, Ooyala was on a run-rate to do $100M in revenue by 2018, which would be about half the size of publicly traded OVP Brightcove.

Any Ooyala employees now looking for a job are welcome to send me their resume, as I often get asked by vendors looking to hire who’s available in the market.

Data Shows Traditional CDNs Are Losing Competitive Edge in US Mobile App Arena

PacketZoom recently analyzed the top 100 websites and compared it with the top 100 mobile apps to see which CDN solutions are dominating the competitive landscape and to determine how much variation there is in CDN market share between web and mobile apps. The data shows that Akamai is leading the market with 35.3% market share (no surprise) with vendors such as Fastly, Verizon and Amazon following a 3:1 ratio. In addition multiple smaller players indicate it’s already a mature and saturated market.

screen-shot-2017-02-13-at-11-28-08-pmPacketZoom also analyzed the top 100 mobile apps, including names like Netflix, Uber and Snapchat and broke down the findings by CDN market share, looking for the dominant players. This time around the results show that Amazon is leading with a 40% market share, most likely due to its strong developer relationships. Since Amazon’s content delivery service CloudFront integrates with other Amazon Web Services offerings, it offers developers an easy way to distribute content to end users, hence putting Amazon on top. Akamai and Verizon follow with 14% and 11% market share respectively, along with fewer smaller players which indicates an evolving market.

screen-shot-2017-02-13-at-11-35-45-pmThe key takeaway from this data is that the mobile app market is a new world that’s very different from the commoditized CDN market and one that is growing faster than anyone had predicted. Mobile apps require delivery solutions that have been designed with a mobile-first world in mind, something many CDNs still struggle to do.

PacketZoom shows optimal results with Amazon CloudFront since both solutions are running in the same data centers, which saves the need for an extra network hop to the CDN edge server. Multiple mobile app developers that are already enjoying the ease of use of Amazon CloudFront have told me that coupling it with PacketZoom’s Mobile Expresslane is the easiest and most powerful way to maximize mobile app performance. What’s interesting about new solutions coming to the CDN market is that they aren’t trying to displace the traditional CDNs, but rather make them better. PacketZoom’s in-app technology is uniquely positioned as a CDN enhancer and not a CDN replacement. By removing roadblocks in the mobile last mile, PacketZoom says they are able to significantly accelerate performance by 2x to 3x, rescue up to 80% of sessions from TCP connection drop and reduce CDN costs.