Commoditization and the Future of Content Delivery Networks: Part One

As a result, customers that were formerly reliant on a single CDN are out on the marketplace looking for additional CDNs to drive traffic through to avoid the risk of their content being inaccessible if their primary provider’s network goes down. This has brought new business to the door of all CDNs, and highlighted the effects that the commoditization of bandwidth has had on the market. "Our goal is to get in there and do a better job of the face-to-face work," says Buck. "I think that’s probably fairly normal in a commodity-type business."

Pricing was formerly a primary differentiating factor, but that’s no longer the case, especially as CDNs offer to match the prices of their competitors when trying to woo customers looking to diversify their CDN relationships. "It’s not like a few years ago when prices were much higher and customers were trying to lower their bills," says Akamai’s Curis. "Our customers are starting to build very profitable businesses around delivering digital media, so people are starting to watch for differences in quality." As streaming media shifts from a traditional a loss leader to a revenue generator, the dynamics of the services market change, which directly affects CDNs. "Bandwidth is getting commoditized, and the price is coming down," says Curis.

Part Two of this article deals with how streaming media’s evolution affects how CDNs build out their services and compete for business in the future.