Networks alone not enough for carriers to compete in CDN

Though telecom carriers in the content delivery networking (CDN) space are quick to point to their networks as differentiators, they will have to climb the service stack – developing more sophisticated service features – to compete.

That was some of the advice from Dan Rayburn, principal analyst with Frost & Sullivan, in a recent Telephony Webcast that you can replay here.

“One of the biggest misconceptions is that the carrier will own this market and win because they own the network,” Rayburn said. “Carriers are going to have to sell up the value chain. They’re going to have to add products in the stack just like the CDNs are doing today.”

Pure play CDNs have been increasingly offering add-on services such as analytics, transcoding, ingestion, storage – even mobile delivery (which is more popular in overseas markets so far). Over the past year, several have touted “ecosystems” of such products, many of them contributed by partners.

Carriers will have to follow. Level 3 Communications, for example, has long claimed a cost advantage in the CDN space due to its network assets. However, Rayburn said carriers haven’t yet proven this cost advantage, and he warned that plenty of CDNs have gone out of business trying to be the low-cost leader. “There’s a long list of CDNs that have given this stuff away to grab market share only to realize they can’t raise another round of funding,” he said.

That said, Level 3 also happens to have assembled a first-rate ecosystem, Rayburn said. “For telcos and carriers, what Level 3 has done is an absolutely perfect blueprint of what carriers and telcos should be thinking about.”

Though carriers have been creeping into the CDN space in a variety of ways, most have not attacked it aggressively yet, as the total world market for video CDN is currently less than half a billion dollars. But essentially all the major US carriers plan to play more seriously in the space in the next 12 to 18 months, Rayburn said. “It’s only a matter of time.”

Leave a Comment

Acceptable Use Policy

authimage
Enter the word as it is shown in the box above.
If you can't see the word, refresh the page.

Calendar

September 2009
M T W T F S S
« Aug   Oct »
 123456
78910111213
14151617181920
21222324252627
282930  

Your Account

Subscribe

Subscribe to RSS Feed

Subscribe to MyYahoo News Feed

Subscribe to Bloglines

Google Syndication