Growth Spurt: CDN Year in Review

The numbers I publish on my blog also don’t mean that every CDN in the market is undercutting the major players. In some cases they aren’t and are selling on different features and functionality, not price. The bottom line is that pricing is still very fluid in the market on large deals—say, more than 250TB delivered per month—but the impact on the market is smaller than many make it out to be. The whole idea that the CDN space is about to implode because there is a "pricing war" going on is inaccurate and backed up by no data. Are some companies not growing as fast as investors may like? Yes. But don’t blame that solely on the current or future price in the market. Again, there is more to a CDN than just the price. CDNs won’t give this stuff away at a lower price just to win business if they’re going to lose money on the deal.

Without a doubt, 2007 was a great year for the growth of the CDN segment of the online video market. We now have more providers in the space who are well-funded and have the ability to focus on building out their businesses over the next few years. We saw CDNetworks, EdgeStream, BitGravity, Grid Networks, ChinaCache, Itiva, Move Networks, and Velocix (formerly CacheLogic) (among others) all raise money, and we saw Limelight Networks go public. We also saw a slew of acquisitions close last year, with SyncCast bought by Thomson, Internap buying VitalStream, Akamai buying Red Swoosh, and Level 3 buying European provider Servecast and the CDN assets of SAVVIS. Throw in the commotion that P2P delivery providers are creating in the market, and 2008 looks to be another banner year for the content delivery providers.

For me personally, the CDN segment of the online video industry is the one I enjoy tracking the most. It’s always evolving, many companies enter and leave the space, lots of money gets invested, and 15 years after it began, it is still one of the most misunderstood segments of our market, requiring lots of education and a lot of debate. If you’d like to stay up-to-date on the CDN market and the discussion that is taking place about the CDN industry, please visit my blog at www.ContentDeliveryBlog.com.