Commoditization and the Future of Content Delivery Networks: Part Two

What you won’t be seeing is Invisible Hand entering into the CDN space. "We’re not the company to manage 15 different geographic locations; we’d rather be adding staff in terms of engineers," he says. But how long it will take for this ideal to become reality is anybody’s guess, as is whether it will be Merkato that powers it or new players moving into the space, such as Arbinet.

Network Commoditization?
As discussed in Part One of this article, CDNs today must work to expand their business on two fronts: network infrastructure and software applications. While applications and services can be developed directly in response to customer demand and/or needs, building out network infrastructure can be a costly venture. "It’s a massive capital expenditure, and one that depreciates very rapidly," says Cahill.

As bandwidth matures as a low-margin commodity and CDNs focus more heavily on developing new applications and expanding their professional services departments, the possibility of the networks themselves being commoditized has to be raised, especially considering the nature of how some of the other players in the CDN space leverage the infrastructure of their competitors.

Nine Systems is just such a company, as its StreamOS technology enables its customers to deliver content through what they refer to as an aggregated CDN. "We have partnerships with AT&T, Advection, Globix, Limelight, AStream, Speedcast, VitalStream, and BT North America, which is really Akamai, among others," says Pete Mountanos, Nine Systems’ COO. In many ways, this approach to handling content delivery treats the networks of the various CDNs as a commodity.

While Nine Systems is working on building out its own network infrastructure—"significantly more than 50% of our traffic goes over our native network," says Mountanos—by tapping into the existing network infrastructure, Nine Systems is able to focus more of its attention on providing "a breadth of offerings to our customers that allows them to treat us as a one-stop shop," says Mountanos. "We do everything all the way down to Web hosting and managed bandwidth."

Further blurring the lines, "we have customers coming to us and saying, ‘Hey, can we tie StreamOS into our contracts with other CDNs?’" says Mountanos. "So we actually have a rollover plan in place where customers can basically turn their other CDN account over to us. We then run it through StreamOS where we hash all the file names, then we upload it back to their provider. We utilize their account with their current provider until they reach their limit and then we switch over to our network or we continue with that provider. Either way they get access to our software suite."