The Online Content Distribution Market - From CDN to Cloud Computing

The growing development of online content requires advanced delivery solutions to counter the major drawbacks of simple unicasting systems. This is the simple behind the tremendous annual growth figures being reported by the CDN market, over 30% despite the downturn, with forecasts indicating a market of 3.5 billion USD worldwide by 2012, coming mainly from North America, but Europe and South-East Asia are becoming key growth markets.


Report Highlights

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Table of Contents

1. Executive Summary . 6

2. Online Content Distribution Trends .......... 8

2.1. Internet traffic still growing exponentially ... 8
2.2. Challenges for scalability on the Internet . 10
2.3. Video on the Internet: big, but not big money ........ 10

3. Delivery Technologies .. 12

3.1. Main technologies for delivery of content 12
3.2. Traditional approach of CDN technologies ............ 14
3.3. Techniques for optimizing delivery ... 15
3.4. Hybrid CDN technologies ... 15

4. Market ecosystem .. 18

4.1. A brief history of the CDN market ..... 18
4.2. Delivery chain 18
4.3. Market players and ecosystem ......... 19

5. Market Dynamics & market sizing ........... 22

5.1. Market dynamics ... 22
5.1.1. Drivers ............ 22
5.1.2. Barriers ........... 23
5.2. Market trends . 23
5.3. Market sizing and forecasts 24

6. Industry economics and business models ... 25

6.1. Value proposition .. 25
6.2. Pricing methods .... 26
6.3. Economics of CDN players . 26
6.4. Business case for online video service based on CDN ....... 27
6.4.1. Catch-up TV model (e.g. ABC) ........... 27
6.4.2. Premium VOD model ..... 28
6.4.3. Viral platform model (YouTube) .......... 28

7. Company profiles ... 30

7.1. Traditional CDN providers .. 30
7.1.1. General overview ........... 30
7.1.2. Akamai ............ 31
7.1.3. Limelight Networks ........ 33
7.1.4. CDNetworks .... 33
7.2. Telcos ............ 34
7.2.1. General overview ........... 34
7.2.2. AT&T . 35
7.2.3. Level3 ............. 37
7.2.4. Verizon ............ 37
7.2.5. BT ..... 37
7.2.6. France Telecom (Orange) ..... 37
7.2.7. Deutsche Telekom ......... 37
7.3. Internet giants 38
7.3.1. General overview ........... 38
7.3.2. Amazon ........... 40
7.3.3. Microsoft ......... 41

8. Outlook: towards cloud computing ........ 42

8.1. Business motivation ............ 42
8.2. Technical motivation ........... 43
8.2.1. Cloud computing architecture segmentation ..... 43
8.2.2. Comparison of architectures . 44
8.3. The cloud computing opportunity ...... 45
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Table 1: Main mergers/acquisitions in the CDN/P2P industry ... 16
Table 2: Top market players ..... 20
Table 3: Main partnerships between telcos and CDN/P2P providers ............. 20
Table 4: Main mergers/acquisitions in the CDN/P2P industry .. 21
Table 5: Trends in online video consumption (USA) .... 22
Table 6: Financial data on CDN Players . 26
Table 7: CDN players' positioning ........... 31
Table 8: Akamai acquisitions .... 32
Table 9: Positioning of main telcos in the CDN business ........... 35
Table 10: Main Internet giants strategies .. 39
Figure 1: International bandwidth growth ... 8
Figure 2: Consumer Internet traffic forecast ...... 9
Figure 3: Evolution of online video consumption ........... 11
Figure 4: Download, progressive download, streaming 12
Figure 5: P2P solutions ............. 13
Figure 6: How CDN works ......... 14
Figure 7: Example of hybrid CDN architecture: the BBC iPlayer . 17
Figure 8: The CDN value chain .. 19
Figure 9: Worldwide CDN market ............. 24
Figure 10: Catch-up TV revenue & costs according to volume of content ......... 27
Figure 11: VOD premium, revenue & costs according to the volume of content 28
Figure 12: Viral platform, revenue & costs according to the volume of content . 29
Figure 13: CDNetworks’ revenue growth ... 34
Figure 14: Global map of AT&T’s CDN (with POP description) ..... 36
Figure 15: AT&T architecture ...... 36
Figure 16: Limelight Networks’ customer concentration .. 38
Figure 17: Amazon data centre map .......... 40
Figure 18: Microsoft delivery forecast ........ 41
Figure 19: Cloud computing value proposition from Akamai ......... 43
Figure 20: Typical components of a cloud computing architecture ...... 44
Figure 21: Worldwide cloud computing market . 46
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