GigaOM Pro

Summary:

The growing ubiquity of the Internet is having a major influence on the video and software industries, which are using it to enable delivery of their products online.

Advanced infrastructures are required to deliver those contents efficiently. The Internet has been built on a best-effort model, but is under increasing pressure as traffic skyrockets. To speed delivery times, web pages and video content are being served through content delivery network (CDN) technologies, which optimize the network usage through different techniques, including primarily caching servers and, increasingly, P2P technologies for hybrid approaches. Software is delivered through cloud computing and its infrastructure offered as a service (IaaS).

In the cases of both CDN and IaaS, end-users benefit from third-party providers’ infrastructure investments, which are shared among the providers’ clients. End-users, therefore, can operate more rapidly and transform most of their capital expenditures into more variable operating expenditures. They can also be more flexible and are able to scale more readily in the case of traffic spikes or rapid growth.

The objectives and benefits of CDN and IaaS solutions are therefore very similar, even though they address generally very different types of services and applications. CDN and IaaS have therefore many common points, both on technology and business aspects, and could converge at some point as they have developed expertise on some complementary elements of the infrastructure. The overall architecture is very similar, as well, with both operations relying on similar building blocks, such as distributed data centers. However, CDN focuses mostly on network aspects to ensure efficient delivery, while IaaS is primarily about virtualization and software abstraction of the hardware layer. But both assets may become useful for providers (telcos, etc, …) and in the context of rising Internet traffic that could bring some congestion and impede the quality of service, they are likely to converge.

This report looks at the different business cases for both technologies and identifies areas of opportunity. The report also provides a look at key players, a market forecast, and recommendations for CDN players, Internet giants, technology service providers, hosters and telcos.