On Edge: The Content Delivery Evolution
By Nathan Kelley, Director of Product Management, Brightcove
“We operate in an environment—the Internet—where there’s an enormous amount of uncertainty. You can’t be sure what’s going to happen tomorrow, never mind next year. The danger is that the uncertainty can lead to paralysis. You can spend so much time trying to nail down all the possibilities and risks, you never get around to taking action. And if that happens—if you become indecisive—you’re dead. Because in the Internet world, if you don’t take action, somebody else will.
-George Conrades, Akamai CEO 1999-2005
"Although the future is uncertain, as we look ahead to the next 20 years, it is those who are nimblest in this changing environment who will be most successful"
When Conrades shared this insight in a Harvard Business Review interview in 2000, he was urging industry experts to embrace uncertainty. This sentiment holds true today as well. As the digital media ecosystem changes, those in the content delivery network (CDN) market place must remain nimble and decisive. The need to keep up with continuous change in digital media is driven by several forces, including those who create content, own content, develop solutions to deliver content, and consume content. Given this pressure, in less than two decades the CDN marketplace has transformed in a very big way around the world.
As we approach the 20-year horizon in the business of CDN, social media accounts total more than 2.2 billion compared to more than 3.1 billion active internet users, and streaming video services subscriptions will top 66 million by 2020. Let’s take a look at the evolution of CDN to better understand how it will impact consumer behavior in the future.
Time Travel to the Birth of CDN
The year was 1998. I was a fresh-faced college grad, a gallon of gas in the U.S. cost $1.03 an organization called Google was founded, and CDN was in its infancy. The “marketplace” primarily consisted of Akamai Technologies (also founded that year), followed closely by Speedera Networks (to be establishedin 1999).
The demand for CDN was driven in part by the reality that the World Wide Web was not meant to deliver heavy, rich HD video either in a Live or VOD format. This is what spurred the idea of a platform designed to move content around a big network to increase availability of content, resulting in better performance and scalability.
In the late ‘90s, the primary responsibility of the CDN was to improve website performance by delivering static content (think HTML pages and downloadable files) to potentially “offload” this content from the customer’s origin server. Simply put, this was done by deploying a platform of hardware or servers across geographically diverse regions and in high-traffic metro areas to serve static content to end usersfaster. The idea was that if you could offload content from a customer’s origin servers while increasing the speed of delivery, you’d deliver a compelling solution.
Fast Forward to Today’s Second Generation CDN
These days, I’m paying off those college loans, gas is more expensive, I wish I’d bought some Google stock, and the CDN business is booming.
The CDN marketplace is expected to grow at aCAGR of 20.5 percent over the next ten years (Market Insights, June 29, 2016), and Cisco estimates video will account for 80 percent of global internet traffic by 2019. Today’s demand for CDN services is fueled by multiple factors, including pressures to improvebroadband infrastructure and increase consumption of rich media.
As the marketplace continues to grow, it is important to reflect on the four main areas CDN’s impact today:
• Operations: The internet has evolved to become mission critical forcompanies that have a business model based on high-quality internet performance, and CDN’s are key to these companies’ operation.
• Customization: CDN technology has become more widespread with telecommunication companies offering the service to customers, and with the addition of regional CDN’s we are beginning to see significant pressures on price and delivery “specializations.”
• Premium Expectations: These specializations, such as Live event-based delivery or in-country China delivery, have driven CDN’s to focus on making the biggest impact – from serving static files to data caching –to deliver premium video.
• In-House Expertise: Many companies grow to the extent where building their own CDN technology makes sense, like Netflix, Apple and Google, while platform companies are now building CDN technology into their offerings (think AWS and Microsoft).
Discovering advanced ways to deliver content through a CDN partner(s) is critical. Especially as the demand for content continues toincrease, consumers expect to engage with content via multiple connected devices, and broadband access is on the rise.
What to Expect with Next Gen CDN
When I think about the future, those student loans will (eventually) be paid off, perhapsall of our cars will be electric, and we can count on CDN platforms to continue to transform based on the digital media ecosystem’s evolving needs.
Looking ahead, we can expect CDN platforms to:
• Serve true dynamic applications, such as helping consumers build vacation packages easier and faster ortransferring assets at banks quicker and with better security.
• Pre-position content on the connected device based on a consumer’s historic viewing patterns
• Deliver solutions that enable higher throughput, quicker content access and large scale, live, over the top events
The CDN marketplace has shifted from a nice-to-have blackbox to a mission-critical technology for companies that depend on delivering a premium web-based experience to a distributed consumer base.
While there is no crystal ball as to exactly what the future holds, one thing is certain – the Internet ecosystem and technology for distributing content is evolving at an unprecedented pace. As we look to the next 20 years, those who are nimblest in this changing environment will find success.