Commoditization and the Future of Content Delivery Networks: Part One

Providing fast, reliable, managed access to bandwidth is the core of what content delivery networks (CDNs) offer to their clients. CDNs provide a scalable means through which content publishers can get their assets onto the Internet without having to pay for, set up, and tend to a series of servers,. While the demise of the Dot Coms stunted the growth of successful business models surrounding digital video delivery, their initial success literally laid the groundwork for today’s distribution revolution, as the late ’90s saw a huge buildup in the capacity of the fiber-optic backbone of the Internet.

Because of the massive amount of bandwidth available, CDNs’ improvements in efficiency and penchant for selling it freely (or at least cheaply), and the increasing use of online media across all industries, bandwidth itself has become a commodity. Commoditization implies that price and therefore profits are low and that there’s a relative simlilarity among providers, making product differentiation difficult. So what does that mean to CDNs?

This article will take a look at how CDNs are working to differentiate themselves in a highly competitive marketplace and in the face of an unknown future as the economic ramifications of commoditized bandwidth are more fully known. Part one of this article will deal with how CDNs are trying to differentiate themselves.

Build It Out
Traditionally, a CDN consists of a network of geographically distributed servers with a suite of services and applications built around managing various aspects of delivering digital media online. The quality, reliability, and reach of the server network is the first thing that many of the larger CDNs point to as a primary differentiator of their services.

Limelight Networks is a leading CDN for the media and entertainment industry, and their decision to focus on building out their network came directly from that client base. "Our customers are looking for us to drive efficiency," says Mike Sawyer, VP of marketing for Limelight. "The cost of bandwidth isn’t the only determinant of price; being efficient is another major component. We determined that you really need to own your own infrastructure to achieve the highest efficiency possible. And we’re aggressively pushing the network to ensure that we can get better performance at a lower price point."