Video CDN Report From Frost & Sullivan Now Available At Discounted Price

I'm happy to announce that the first report I helped author at Frost & Sullivan on the video CDN market is now available for sale. (Full table of contents at: www.cdnreport.com) The report will only be available for the next three weeks at a special price of $1295. Most major research firms don't sell individual reports on a one-off basis and only make them available to customers who sign up for a subscription based service.

Frost & Sullivan realizes the importance of this report and like me, wants to be able to get the data into the hands of as many people as possible. To make that process even easier, I will be personally taking the orders and fulfilling the reports myself. You don't have to buy it through a website and wait hours or days to get it delivered. Simply call me anytime at 917-523-4562 and I will take payment over the phone and send the report out in real-time.

While there have been a bunch of research reports put out on the CDN market, this one is unique for multiple reasons. For starters, it focuses specifically on the video CDN market and breaks out video revenue and market sizing from the larger, more generic CDN industry. Some of the data includes:

• dual scenario revenue forecasts based on current and future economic conditions
• compound annual growth rate percentages for video delivery from 2005-2013
• revenue forecasts by geographic regions
• revenue forecasts by vertical markets (M&E/enterprise)
• vendor market share by revenue
• market drivers and restraints
• types of web video applications and customers
• database of key industry participants

The 75 page report includes nearly 40 charts and graphs and anyone who purchases the report has access to do a follow up call with me with any questions they may have. I am also willing to help further break down the data in the report and provide even more granular details on the numbers.

I've always found that the process of purchasing one-off research reports is too un-personal, takes too long to get fulfilled and many times, is difficult to follow up with those who authored the report. So we're going to do the exact opposite and really try to help folks better understand the data and market, even after you have already bought the report. We stand behind our research and think it is important to provide a different level of personalized service and look forward to doing so.

Amazon Lowers CDN CloudFront Pricing Down To $0.05 Per GB For Volume

Amazon announced this morning that come February 1st, it will lower pricing for their content delivery network service, CloudFront, for large customers doing more than 1,000TB a month in volume. Amazon has already posted the new rates on their website.

This is an expected move from Amazon as their pricing was a little high for really large volume deals and with CloudFront now up and running for a few months, Amazon says, "As we continue to reduce our costs, we're able to pass the savings on to our customers."

The new pricing still does not make Amazon a threat to any of the large scale CDNs, but it only increases pressure on the smaller CDNs for customers who need very commoditized download services.

Apple Moves To Dual CDN Vendor Strategy: Now Using Limelight With Akamai

For many years, Apple has relied on Akamai to deliver the vast majority, if not all, of Apple's content. But in the fourth quarter of 2008, it appears that Apple moved to a dual-vendor strategy and started using Limelight Networks in addition to Akamai for the delivery of OSX software updates, iPhone updates and app delivery from Apple.com and the iPhone store.

Starting in the fourth quarter of 08, content that I historically saw being delivered from Akamai, also started coming from Limelight Networks. Now I don't know if this content was "exclusive" to Akamai or if 100% of it historically came from Akamai, but as an example, in Q2 of 08, my OSX updates always came from Akamai domains. Last Friday, Apple released an update to QuickTime, version 7.6, and the update came from the Limelight network out of a Seattle POP. (cds.303.sea.llnw.net)

I don't know what parameters Apple uses to decide how they redirect a user's request to one CDN over another, but it appears much of it could be based on the geographic location the user is coming from as I also noticed this exact same QuickTime update getting delivered from Akamai depending on what city the user was located in.

I saw this dual-vendor approach happening across many different pieces of content for Apple including OSX updates, application downloads from the Apple.com site (like the iLife trial) iPhones software updates and some apps for the iPhone app store.

I started noticing all of these changes around the November time frame and didn't see a single piece of content being delivered for Apple, by Limelight, anytime before that. That's not to say it could not of been happening earlier, but I am one of those Apple freaks who downloads tons of stuff, always looking at where it comes from and have never seen the llnw.net domain show up anywhere before November.

In addition to this, I also saw the Limelight domain showing up for a limited time for HD videos coming from the Apple.com site, mostly around the holiday time last year. Tracing tons of that content now only shows me Akamai domains though, so I don't know if that is still happening.

It is also interesting to note that Apple's change to a dual-vendor strategy comes soon after Apple had major issues with the iPhone 3G launch and the MobileMe offering after experiencing outages with both services in the third quarter of last year. However, I don't know if either of these problems were a result of an outage or capacity issue on the network since Apple didn't say why the services went down. And while both Akamai and Limelight told me "no comment" when I asked them for details on delivering content for Apple, Akamai did go on record to say "Akamai had no service issues on our network in Q3 of 2008".

But the fact that the llnw.net domain is starting to show up for some of Apple's downloads shows Apple is looking to rely less on just one CDN to handle all of their traffic requirements which makes sense if you want to ensure you always have enough capacity. I don't know Apple's traffic volume, but considering how many iPods and iPhones they keep selling, you have to imagine their traffic has some crazy growth each quarter and moving to a dual-vendor strategy should help keep Apple's services from having future performance issues. We already know that no CDN has unlimited capacity and can only handle so much traffic at any given time and if you are Apple, using more than one CDN is just smart business.

Now one could speculate that Limelight only has a very small fraction of Apple's business. That may or may not be true, we don't know. But even if it's only a small percentage, a small percentage of Apple's traffic is huge considering how much volume Apple must be doing every month. And for most customers who move to a dual-vendor strategy, they don't put only a small amount of traffic with one vendor as that defeats the whole purpose of why you have a dual-vendor strategy to begin with. What financial impact Apple's move to a dual-vendor approach has on either Limelight or Akamai is yet unknown, and I don't know any of the contract details.

Quite often I am asked if most content owners use more than one CDN vendor for video or if what we are seeing by Apple is a trend. It's really hard to answer that question since some content owners tell me that using two vendors is a hassle due to having to two contracts, two sets of raw logs, two kinds of reporting etc. But other customers tell me they never want to rely on just one vendor and using two CDNs is essential to their business. That said, I have noticed that lately, it seems many of the big content portals do seem to be using two vendors, but not all of them.

I also think this move by Apple is a testament to both Akamai and Limelight's network performance, specific to video downloads. While I am sure both companies would disagree with me when I say that they both offer a similar level of performance on their network, the fact is that most customers tell me they see very little difference between the two networks for commoditized video delivery services, as it pertains to network performance.

In terms of pricing, reporting and other services outside of simple video downloads there are plenty of differences between the two companies. But if any customer is willing to give both CDNs the same type of video content for simple downloads, clearly the customer trusts both networks and does not see a big difference between the two in terms of performance, especially if they are sharing the traffic.

Limelight To Akamai: "My Network Is Bigger Than Your Network", The Debate Begins

A few minutes ago, the RSS feed from Limelight's blog showed a new entry with more details on Limelight's network capacity during the Obama inauguration webcast. While both Akamai and Limelight put out stats after the event was over, they each used different metrics in their releases making for an apples to oranges comparison.

Akamai said the total number of simultaneous audio and video streams on their network across all of their customers for that day was 7.7 million. Limelight's release only gave out the total number of simultaneous streams for the webcast, which was 2.5 million. Days later, Akamai broke out for me the total number of simultaneous streams for just the Obama webcast at around 3.8 million. Today, Limelight's blog post says that at the same time Akamai was reporting 7.7 million simultaneous streams for all of their customers, Limelight saw just over 9 million simultaneous streams for all of their customers on their network.

Clearly this is turning into a "my CDN is bigger than your CDN" debate which quite frankly, is impossible to prove for either side. For starters, neither CDN says what the average bit rate was for the simultaneous streams on their networks. If one CDN had more audio streams, or lower bitrate streams, they could deliver more than the other and it would completely skew the numbers.

In addition, network capacity is difference than network performance. Lots of folks have capacity, not as many have good performance. We don't have any third party metric to show the performance difference between the two networks during the inauguration webcast.

Limelight's bog post points to a graph by Arbor Networks that shows traffic data from ten U.S. consumer ISP networks which says that Limelight saw an increase of 160% versus Akamai's 17%. Those numbers don't make any sense to me and quite frankly, it's really hard to tell exactly what they mean.

Network scale is important, but I think performance measurement is even more crucial. I guess the CDNs putting out all of these numbers are a start, but still, I think it's nearly impossible to compare any of them apples to apples for the Obama webcast based on such limited data.

Gregg Moss, SVP Of Enterprise Video, Bank of America Confirmed As Keynote For East

I am happy to announce that in addition to Paul Sagan, CEO of Akamai, Gregg Moss, who is the SVP of Enterprise Streaming Media Strategy and Delivery for Bank of America, is our second confirmed keynote for the Streaming Media East show in May.

While the media, entertainment and broadcast verticals seem to get all the press these days, there are still lots of exciting things taking place with the entire online video ecosystem in the enterprise market. Gregg's presentation will detail how Bank Of America is using online video both internally and externally and also talk about the role that devices other than the PC play in helping them deliver their message.

In addition to Paul and Gregg, we'll have two more keynotes to announce shortly who are both from the M&E/broadcast industries. We'll have a nice balanced set of keynotes representing the media, broadcast, enterprise and infrastructure verticals.

The advance program for Streaming Media East is now complete and will be posted this week and placement of speakers will begin in the next few days.

Deutsche Telekom Enters The CDN Market, Partners With EdgeCast

This morning, Deutsche Telekom announced that it would enter the content delivery market by reselling the content delivery services of EdgeCast. For months, the two companies have been quietly working to put the solution in place and Deutsche Telekom is already actively selling the service, and launching it with customers, primarily focusing on the European market.

Deutsche Telekom is now the fifth telco to have entered the content delivery market in the past 18 months. Reliance Globalcom is reselling Internap, Tata Communications licensed BitGravity, Level 3 acquired the CDN assets of SAVVIS and AT&T is building out their own CDN from scratch. It's interesting to note that of the five companies, four of them have taken completely different approaches to enter the market.

While EdgeCast will get to leverage some of the IP assets of Deutsche Telekom, customers of Deutsche Telekom won't just be using the Deutsche Telekom network. Content will be delivered over Deutsche Telekom IP backbone and through EdgeCast servers located on other networks. This should give Deutsche Telekom a leg up on some of the other telcos who have chosen to only deliver content over network assets they control.

While the pure-play CDNs still control nearly all of the market for video CDN services, the telcos are positioning themselves for the future, when video delivery becomes a billion dollar industry. While the telcos still have a lot to put in place in order to compete with the pure-play CDNs, as long as the telcos can wait it out, they should start to grab some share of the market over the next 24 months.

Breaking News: Jury Rules In Limelight's Favor, Not Infringing On Level 3 Patents

A ruling just came out in the Level 3 versus Limelight patent infringement suit. The jury found that Limelight does not infringe on Level 3's patents. More details to come as I get them.

Akamai: About 3.8 M Simultaneous Obama Streams, Details Capping Of Customers

Last night I had a long conversation with Akamai about the inauguration webcast and got more details on the actual number of simultaneous streams they served and their methods and reasoning for capping customers on their network.

Many who are writing about inauguration traffic numbers are quoting from the Akamai press release and implying that Akamai delivered, at peak, 7.7 million video streams of the inauguration, which is incorrect. That 7.7 million number is the total number of all audio and video streams for all of Akamai's 2,800 customers delivered on their network that day. Out of that 7.7 million number, Akamai said roughly half of that was just for the inauguration. That puts my earlier estimate of around 8 million simultaneous streams combined across the Akamai, Limelight and Highwinds CDN a little high, with the number being more around 7 million.

Akamai also stated that they delivered the live webcast for "twelve major broadcast customers" although I can't say who all of those customers were since they don't have permission to use all of the customers names. How much revenue they earned from the inauguration webcast amongst all of those customers is not being shared right now since Akamai is currently in a quiet period. But if someone asks them on their next earnings call about this, it sounds like they might make that number public. Needless to say, it's not a big number and anyone who knows the space well knows that being in the live events business means tons of work, lots of headaches and very little revenue. These one-off, large-scale webcasts are not moneymakers for the CDNs. 

Aside from the numbers, we also had a lengthy discussion about how and why Akamai caps customers and the business reasoning behind it. As much as some may want to think, there is no such thing as unlimited capacity on a day like the inauguration, even for Akamai. On the StreamingMedia.com discussion lists, there were some Akamai customers talking about how they had been capped by Akamai on the day of the webcast without asking to be. While some Akamai customers seemed upset by this practice, it's also important to realize that many customers did not provision properly for the event. Many customers also were not willing to pay Akamai to guarantee a certain level of service or capacity. A few of Akamai's largest customers were in fact willing to pay more and paid upfront to guarantee they would have the capacity they wanted. Even with that, those customers went way over what they were expecting in terms of traffic and had to be capped. One major customer provisioned for 30GB and peaked at 125GB and Akamai still delivered it. But at some point, they had to cap what they would deliver when the customer is 4x over their capacity planning.

Akamai had to make a business decision to cap customers based on the fact that they have 2,800 other customers they have to keep up and running. Any other CDN would have made the same decision and when customers don't plan, or are not willing to pay to provision for a surge in traffic, no CDN can let that affect all of the other customers on their network. Imagine the impact to Akamai if they didn't cap any video customers on that day and as result, their ecommerce customers went down. Akamai has 83 of the top 100 ecommerce sites on their network and just think of the impact that would of had on the ecommerce industry if Akamai didn't take the necessary steps to keep video from taking down their network. This is simply the way CDNs have to operate on the rare occasions when something like the inauguration webcast happens.

Akamai did say that moving forward, they should cap customers using a better method by using things like a waiting room as opposed to viewers getting an error. The waiting room is what was used by CNN and while I didn't like the experience, it makes more sense to me now knowing the reason behind it. But this also raises a very interesting scenario though since the inauguration webcast was a planned event. What happens if a major breaking news story happens and we see traffic like this again? In that case, CDNs would have to cap customers again since almost all customers do not pay any premium for what is essentially breaking news insurance, thereby guaranteeing them tons of excess capacity at a seconds notice.

While the content delivery market as a whole has historically used marketing phrases to imply that they have "unlimited capacity", that's simply not reality. This is the way the Internet works and it puts things into perspective when many want to say that the Internet will drive broadcast TV out of business, that HD quality video will be delivered to millions anytime soon or that online video will get the same sized audiences that TV broadcasts get. The Internet has major limitations for delivering video to large-scale audiences and while many want to complain about the problem being at the ISP end, or with the end users broadband speed, the bottleneck is also on the CDNs end.

MSNBC Now Porting Video To Xbox Live: Inauguration Videos Playing In Dashboard

Less than four hours after Obama was sworn in, I logged into my Xbox Live dashboard and was surprised to get a special section that had all of the inauguration videos already archived and available for viewing. The videos, provided by MSNBC, had pretty good quality and started playing very fast. This is the first time I've ever seen MSNBC providing any video content to the Xbox and I wonder if this is going to be the start of a new trend on their part. While much of what MSNBC covers would not be relevant to the Xbox Live audience, I could see other forms of content potentially making it to the console.

Has anyone else ever seen content like this before on Xbox Live?

Inauguration Numbers: CDNs Deliver Over 8 Million Simultaneous Video Streams

While it is impossible to know the exact number of people that watched the event at one time, Akamai, Limelight and Highwinds combined did over eight million simultaneous streams for Obama's inauguration video, across all of their customers. Limelight said they peaked at around 2.5 million streams, Highwinds say they saw about 625,000 and my estimate is that Akamai did around 5 million.

While Akamai put out a press release saying they did seven million simultaneous streams across their network, they did not break out how many of those were just for the inauguration. Since they peak at around a million streams already on any given day and the release states that some of the seven million streams were on demand, I figure Akamai did around five million simultaneous just for today's inauguration. (I have a call into Akamai asking for an explanation and will update the post when I hear back)

In addition, CDNs including Level 3 and others delivered some live streams of the event, but in much smaller numbers. Adding all of them up and I think a fair estimate would be that between 8-9 million people were all watching a live video stream at the same time.

Hard to know how this compares to other events since most of the CDNs don't give out simultaneous stream counts, but it's definitely up there in terms of being a large number across all of the CDNs combined.