As with every new technology, we can expect lukewarm reception initially. In my opinion, I would not hail the first phase of telecom CDN a success in terms of achieving revenue or traffic offload goals. To begin with, the past telecom CDN offerings have been somewhat limited to bit delivery, which is important, but not enough to win over many media or enterprise customers. These customers are keen to enhance their existing enterprise portfolio and differentiate their network, hosting and Cloud services. The offerings will need to evolve to address enterprises' needs to not only deliver content, but also improve service quality, simplify workflow, reach an array of devices, and provide global reach and scale.
Another reason was that the CDN offerings were only limited to the operator's network footprint, which led to the business requirement of having "federation". This was not in line with online businesses' strategy and business roadmaps, seeing how they want global partners, to reach customers wherever they are or decide to be located.
Thankfully, this is changing. We see more network operators considering CDNs as a core element of their network infrastructures. We are also witnessing an emerging opportunity for network operators to become valuable stakeholders in the content distribution value chain. In my conversations with network operators, apart from improving delivery and offloading traffic, it was clear that many of them need to license, own, and operate the big bit delivery component of a CDN service.
They build their own Operator CDN capabilities, allowing them to monetise their network, reduce costs and enhance retention, customer loyalty and service satisfaction.
I see the approach to an operator CDN as a partnership—the operator provides the technology and platform for them to sell services to their customers, and for global delivery. It should bring customer traffic from premier brands, and allow the operator to optimise and offload that traffic from the very first day, which can already have large economic advantages. The operator can capitalise on traffic growth and eliminate the complexity of building a CDN and interconnect across providers.
Lastly, they can leverage their CDN and be an internal customer of that CDN. In other words, they can use it to deliver video services to connected IP-based devices. Many networks also have large content libraries, and their subscribers increasingly want to view that content beyond the legacy set-top box.
A recent report indicated that the global CDN industry will reach US$7.4billion by 2017, which is not the least surprising.
The proliferation of new devices in the marketplace will continue to create numerous challenges for content providers who are trying to satisfy customer demand for anytime, anywhere access to content. Consumer adoption of Internet videos and other media will continue to grow; networks around the world are going to experience an explosion in traffic growth, which will result in congestion across an operator's network from aggregation, to backbone, to interconnect.
Parimal Pandya is Regional Vice President, Carrier Strategy Asia Pacific & Japan, at Akamai.
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