Part 3 - The CDN Survival Guide

One company that you won't see moving into other focuses outside of straight content delivery is EdgeCast, according to company President James Segil.

"We're not trying to get into advertising, or IP transit, or colocation," Segil said. "The top of the market with the big volume accounts is truly commoditizing, and Akamai, Limelight and Level 3 are all going after that. We're focusing on smaller accounts that need self-service, as well as reselling through our carrier partners like Global Crossing and Deutsche Telekom."

Segil said his company, which began the year with around 200 customers, has since grown its base to 450 direct customers and 550 reseller customers through those carrier agreements and other reselling arrangements. Segil said he didn't think the larger CDNs could support their large infrastructure investments in the long run if delivery prices continue to fall, a statement which Limelight, Akamai and Level 3 representatives all disagreed with for obvious reasons.

Mark Taylor, head of media product and strategy for Level 3, said his company was seeing pricing pressure, but echoed Akamai's Napoleon in saying increases in demand are more than making up for lower prices per GB delivered.

"We are continuing what we started in January through investment in features and functions to push us past our competition," Taylor said. "We've improved our ability to provide content analytics, which we now do more comprehensively and more quickly than any competitor, as well as improving our self-service suite of products. Within the next 12 months, we'll be able to provide completely open access to customers to be able to do full self service for their CDN needs."

Taylor said the company is seeing success in streaming live events, and he touted Level 3's delivery of live streams of the Tour de France and Michael Jackson's funeral as evidence of the quality of work Level 3 can provide. Taylor also said he saw the market moving more to differentiated roles and said he hoped to continue to position Level 3 as a unique solution for customers, rather than just a part of an "amorphous group doing more or less the same thing."

He said he saw Akamai moving to a more cloud computing focus and saw Limelight targeting mobile, though he questioned both its viability in this arena and the eventual impact of video delivery to mobile devices. He said that while EdgeCast "is a great marketing machine," he was rather baffled about the carrier reseller agreements it had signed, hinting there was some displeasure about the performance of the company in these deals. He doubted any company outside of the current top 5 CDNs would survive in the long run.

Part 4 of this report contains conclusions and comment from CDNetworks and BitGravity, click here

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