cdn

CDN Limelight Networks optimistic on 2009 operations

Pete Wylie — Tue, 02 Dec 2008 17:53:49 -0500

Limelight Networks has had somewhat of a rough time this past year, beginning with a patent infringement case it lost to Akamai to the tune of $46 million on March 3, 2008. Its stock price dropped 25 percent that day and has yet to recover, but Chief Strategy Officer Mike Gordon said the CDN is much better positioned than people tend to admit.

"First, everyone always mentions the Akamai case as a reason to think Limelight isn't performing well or can't get profitable," Gordon said. "But we've put aside the money to fund the damages except for interest, and we won't need to save any more for the damages after Nov.1. You can expect to see total money spent on litigation and other legal costs decrease significantly and we also have reduced our reliance on the patent in question to 11 percent of total revenue."

Gordon said the company is optimistic about its status entering 2009, as it continues to see its revenue per customer grow and its many partnerships flourish. As an example, he mentioned Netflix's recent announcements that it would stream videos directly to a variety of devices in the living room, such as Xbox 360s and BluRay players, as a major positive for Limelight. Limelight has an existing relationship with Microsoft, and will handle the incoming streaming to its gaming console, adding to a trend of Limelight increasing revenue per customer into 2009.

Limelight has operated at a loss for many quarters in a row, but if the litigation expenses from the Akamai case and the damages award prove to be the biggest factors behind that, as Gordon posits, Limelight could be in better shape than first meets the eye. Gordon points to the increased of revenue per customer from $94,000 to $102,000, and a 9 percent sequential increase in profit in the third quarter as indictors of growth to come.

"We'll also increase our margins through managing costs and updating infrastructure to become more efficient," Gordon said. "Customers will continue to choose Limelight because of our scale, performance and partner ecosystem."

Level 3 and Pando announce cloud partnership

Pete Wylie — Thu, 20 Nov 2008 12:20:42 -0500

The cloud got a little faster Thursday, as Pando Networks announced it has selected Level 3 communications to support its cloud-based content delivery network. Pando will leverage Level 3's CDN infrastructure to deliver rich media content to commercial customers.

"Level 3's CDN technology enables us to expand our content delivery cloud service with greater reliability and quality than standalone P2P technology," said Robert Levitan, chief executive officer of Pando Networks, in a prepared statement. "This expansion builds out our technology platform to provide customers with a more powerful and cost effective solution to deliver online content."

The partnership will allow Pando to deliver large files to its customers more efficiently and quickly, creating more ability to stream HD video, among other things. Level 3 will also support Pando's partnership to deliver HD video to NBC Direct.

Within its work with the P4P working group, Pando has racked up significant kudos from AT&T, Comcast, and Verizon for improving download speeds of rich media while cutting down on bandwidth consumption.

For more:
- see the joint release here

Akamai to cut 110 jobs

Pete Wylie — Thu, 20 Nov 2008 09:47:08 -0500

CDN market leader Akamai announced extensive job cuts Thursday, saying it would eliminate around 110 positions -- 7 percent of its workforce. The company said the cuts will be part of a restructuring aimed at lowering the company's expenses, due to the worldwide economic downturn.

Akamai did not reveal where the cuts would be made, but it's likely that a good portion of them will come from the company's headquarters staff of about 650. It said the cost of the severance program will be around $4 million, to be assessed in the fourth quarter.

Akamai spokesperson Jeff Young told the Boston Globe, "Our goal is to continue investing for growth despite the current economic climate."

The company has continued to grow profits, which makes the cuts even more interesting. Akamai's profit in the third quarter was up 37 percent to $33.4 million on revenues of $197.3 million. Akamai also had the cash to dole out for targeted ad firm acerno just last month.

It's not a good sign for the CDN space or the online video economy in general to see Akamai shedding jobs. Intense price competition with other players in the space like Level 3 and Limelight is probably as much to blame as the economy for Akamai's need to restructure.

For more:
- the Boston Globe has an article on the job cuts

Will online video and TV eventually merge?

Pete Wylie — Wed, 12 Nov 2008 10:25:52 -0500

Since TelcoTV is this week, set-top/online video convergence is worth discussing. By the way, Dan O'Shea is providing some interesting coverage on the keynotes and major announcements at our sister site, FierceIPTV, that you should all check out.

Several big name companies have announced plans to stream movies directly to set-top boxes in the past few weeks, with Netflix leading the charge and racking up partnerships and distribution deals. Sling Media probably has the model closest to true convergence, as it is actively working on making online video content available on HDTV's, TV content available online, and both online video and TV content available on mobile devices. Even old-line Blockbuster has taken the set-top plunge.

With myriad transcoding standards and streaming platforms available, compatibility issues always arise when discussion of migrating online video content to big television screens occurs.

You also have to think that YouTube, Hulu and especially Veoh, as it seeks to increase market share, will be researching and perhaps developing solutions that bring the huge inventory of online video to the TV with clarity and integrity.

All the big CDN's would have a stake in the move to integrate the two, currently separate, media. Akamai, Brightcove, Level 3 and others could see big upticks in hours of videos streamed if consumers begin to watch large amounts of online video on their home televisions. Those that also have video platforms or players could tweak them for use on TVs as well.

Of course, traditional TV networks, both cable and broadcast, would stand to lose considerably from the advent of a solution that makes other content widely available on TVs. The competition for the TV time from free content would likely drive down the ad rates TV networks can charge. If online video companies start stealing eyeballs from the Big Four, expect some not-so-friendly words or even lawsuits, as the TV companies defend their turf.

In addition to the traditional companies in the online video space, you can't count the Telco IPTV bundled providers out, because they already have a connection with large customer bases, and could add online video-to-TV services as just another part of the bundle.

I'd be very interested, as always, to hear from you about your thoughts on this issue, how soon it might happen, will it ever catch on and the direction the adoption of online video content will take in regards to viewing the content on home TVs.

- Pete

Akamai releases 3Q financials

Pete Wylie — Fri, 31 Oct 2008 12:04:34 -0400

Akamai released its 3Q numbers Thursday, showing modest growth from last quarter and 22 percent revenue growth over the same quarter last year. Third-quarter revenue totaled $197.3 million compared to $194.0 the previous quarter and $161.2 million in 3Q2007.

"We delivered solid earnings and revenue growth in an increasingly difficult environment, and year-to-date we've generated a quarter of a billion dollars in cash flow from operations," said Paul Sagan, president and CEO of Akamai. "We continued to experience strong growth in our newer solutions, such as application performance services and dynamic site acceleration, and we're excited about the introduction of Akamai's Advertising Decision Solutions product line complemented by the announcement of the pending acquisition of acerno."

The acerno acquisition, the value of which was not released, should give Akamai additional revenue streams from targeted advertising once the deal is completed at the end of 4Q. Its partnership with Microsoft to stream HD programming is another revenue stream to watch for as Akamai enters 2009.

The company appears well-positioned to weather any dramatic economic downturn, as it has $789 million of cash and cash equivalents at its disposal, according to the report.

For more:
- see the Akamai release here

Related articles
Akamai buys acerno, gets targeted ads
Microsoft and Akamai join forces for streaming HD

Microsoft and Akamai join forces for streaming HD

Pete Wylie — Tue, 28 Oct 2008 11:49:41 -0400

Microsoft and Akamai are forging a new partnership aimed to increase HD streaming video performance. The two tech heavyweights, which have been collaborating ever since Microsoft gave Akamai $15 million in 1999, will share products to improve streaming performance by using adaptive technology that targets jerky video caused by buffering issues.

Akamai reportedly will launch a beta test of AdaptiveEdge Streaming for Microsoft Silverlight next year. Microsoft will contribute its Internet Information Services 7.0 Smooth Streaming (IIS7.0) product, which matches a video player's streaming speed and resolution to changes in a user's connectivity to decrease annoying video stoppages for buffering time.

Akamai will market the service as part of its extensive global CDN offerings. Content providers certainly will be intrigued if this technological partnership yields smoother video delivery to their customers. This is another significant online video delivery play for Microsoft, as it gave Move Networks, an HD online video provider, an undisclosed amount of funding in August.

Both companies also announced other news last week, as Microsoft unveiled plans for Silverlight 2 and Akamai announced the acquisition of targeted advertising firm acerno.

For more:
- see the CNet.com blog post here

Level 3 expands CDN in Asia

Pete Wylie — Tue, 28 Oct 2008 10:30:22 -0400

Level 3 announced today it has expanded its CDN capabilities by tenfold in Asian markets. Level 3 gained a footprint in Asia with its Dec. 2006 acquisition of Savvis's CDN network, some of which was in Asian markets.

To this point, Level 3 had offered North American and European companies backbone support to Asian nations on the Savvis infrastructure. But Savvis's existing network could not handle increases in demand and bandwidth expansion in many of the countries, much of which comes from online video and other rich content delivery. The newly turned up Level 3 network now provides more scalable and cost-effective content delivery to Australia, China, Hong Kong, Japan, Singapore, South Korea and Taiwan.

Lisa Guilluame, vice president of CDN services for Level 3, said Yahoo! is the lead customer on the new expansion.

"As we expanded to new customers and segments, we realized a lot of our customers' business plans involved reaching the Asian markets," Guilluame said. "With Level 3's increased footprint and capacity in this region, customers can now play one price for all of their CDN needs across Asian, North American and European markets."

Level 3 also announced its first foray into China with this expansion. Guilluame said expanding into China was a "major feat, a major undertaking" that required significant negotiation.

Guilluame stressed the benefit of the expansion for Level 3's customers. "The improved services give our customers increased performance in the region, a decrease in their global costs and lets them avoid trans-Pacific delivery."

For more:
- see the Level 3 release here

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Akamai buys acerno, gets targeted ads

Pete Wylie — Tue, 21 Oct 2008 11:45:02 -0400

Akamai, the Cambridge-Mass.-based CDN, announced a foray into targeted advertising Tuesday with the acquisition of acerno. The transaction, slated to be completed by the end of the quarter, will integrate acerno's shopping and purchase data capture technology into Akamai's Advetising Decisions Solution, which was also announced Tuesday.

Anonymous data generated by acerno's technology will allow advertisers to select appropriate slices of viewership to market their products. According to Akamai, the partnership allows advertisers to streamline ad offerings and generate the most ROI possible. Attempting to allay privacy concerns from the start, Akamai assured customers that the data used in the targeted ads is completely anonymous end-user purchasing and browsing information.

Many top retailers give anonymous data to acerno so the company can generate its predictive reports about online consumer behavior. These reports indicate all steps in online purchasing and analyzes each to determine how consumers find a product, put it in to their online shopping cart, and eventually purchase the item.

Better metrics allow advertisers to star feeling better about placing this ad around online video content. So expect acerno and Akamai's collaboration to be a popular, and profitable one.

For more:
- see the Akamai press release here

SMW: Amazon's CDN - "The only thing you need is a credit card"

Doug Mohney — Tue, 23 Sep 2008 16:28:52 -0400

San Jose, CA - Speaking before a packed room at Streaming Media West, Amazon CTO Dr. Werner Vogels said companies could purchase Amazon's new content distribution service in a matter of minutes with a credit card and also rapidly scale it either "up or down."

Vogels spent the first half of his keynote positioning Amazon beyond its role as one of the world's largest online retailers. "It's hard to think of Amazon as a technology customer... retail is possible due to the technologies the company has developed."

Initially, development groups within the company set up and ran their own servers. As Amazon grew and started new projects, its in-house developers continued to run into "undifferentiated heavy lifting," such as dealing with hardware acquisition, maintenance, and keeping sites and services up. A decision was made to develop and use a shared platform "so developers could focus on development."

Today, Amazon offers the same services to outside developers and companies. Over 400,000 developers have registered to use Amazon's various web services, and outside applications services now consume more bandwidth than Amazon's own brands. Startup companies no longer have to buy their own servers, but can purchase services on an as-needed basis. "Maybe the VC would give you money for 5,000 servers, but you wouldn't have much equity left," Vogels stated. "You push CapEx to Opex... it's a tremendous shift."

Online video has gone though a "a pretty big revolution," with a big cost reduction on production tools, a low-cost distribution mechanism through the Internet, access to "billions" of customers, a better understanding of effective business models and a big increase in content products. "Consumers are aware of different products," said Vogels. "The time they consider broadcast as the only choice is gone."

Providing the CDN as a service provides numerous advantages, Vogels asserted. Service can be turned on in a "matter of minutes" and scaled up or down; scaling down due to drops in demand (during the night, for instance) is just as important as being able to scale up. It's cost effective, can be bought on a pay-as-you-go basis, uses a reliable and proven (Amazon) infrastructure and is also secure. "The only thing you need is a credit card," he emphasized.

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Amazon to launch CDN

Pete Wylie — Thu, 18 Sep 2008 10:13:50 -0400

Amazon CTO Werner Vogels announced a serious entry by the online retail giant into the content delivery network space early Thursday morning. The service, currently in private beta testing, does not yet have a formal name. Vogels said it will use localized edge points on three continents to give app developers and businesses the lowest possible latency for content delivery to users and customers. He expects the service to be offered publicly before the end of 2008.

Vogels said customers can make one call to an API, then "store the data in an Amazon S3 bucket" that can be used to register the content with the CDN. The stored data will be tucked away under a new domain name that customers can use in links to provide the content to end-users.

Another intriguing part of the Amazon CDN model is no minimum requirements or registration fees; Vogels insists the service will be pay-as-you-use, rather than pay-before-you-play. Keep an eye out for findings from Amazon's private beta to see if Amazon Web Service's CDN model can compete with existing (and successful) ones offered by Akamai, Level 3 and Limelight.

There are more than 50 companies with CDN offerings currently, according to Streaming Media. It may be tough to wrest market share from entrenched offerings that have had significant lead time and development investment without a clearly superior offering. But if anyone has the established infrastructure and cash flow to fund a major expansion into this fast growing space, it certainly is Amazon.

For more:
- read Vogel's bold pronouncement of Amazon's beta CDN. Blog post.

Microsoft Building CDN

Doug Mohney — Tue, 01 Jul 2008 10:54:24 -0400

Microsoft is investing massive amounts of cash on data center infrastructure (Cue "Darth Vader" theme). The company is building its own CDN and will likely offer managed services to corporations.

Microsoft's corporate VP of global foundation services Debra Chrapaty--dubbed "Mr. Softie's Internet Infrastructure Czar" by Om Malik--hinted MS has some new special sauce innovations to bring to the data center, including optimized server hardware and software tweaks. MS also is going to put in a big data center in Iowa.

Microsoft is spending "liberally" to upgrade its backbone network and scaling "out" its data center infrastructure. While Chrapaty didn't say exactly how much the company was spending, two years ago Microsoft was spending close to $2 billion. Since then, the company has started work on six data centers and is adding servers at a clip of around 10,000 per month. Its current network backbone speed is 100Gbps, but Microsoft plans to take this up to 500Gbps; no details as to how. Malik thinks current Microsoft backbone provider Level 3 will be a big winner; this reporter thinks the carrier may win on bandwidth, but it remains to be seen what impact the MS CDN expansion will have on its own CDN and video distribution services.

Microsoft's CDN network will be 99 nodes on a 100 gigabit per second backbone. Chrapaty likes container data centers; pack a shipping container full of servers, switches, and storage, roll it up to a site, then plug in power and data connectors.

For more:
- GigaOm gets the scoop on Microsoft's Internet infrastructure plans.

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Crowe: Video 60-70% of Level 3 traffic

AT&T Adds New CDN, Exec to Manage

Doug Mohney — Tue, 24 Jun 2008 16:22:52 -0400

AT&T has announced a suite of content delivery and digital media solutions to help deliver and distribute video and rich media to the trinity of screens: PC, TV, and mobile device. IDC says the CDN market totaled nearly $900 million in 2007 and expected to grow "significantly" in the future.

To head up AT&T's newly created content business unit, Cathy Martine has been appointed executive vice president--Content Distribution. Martine is a long-term AT&T employee who previously headed up its Internet Telephony division.

The new Digital Media Solutions portfolio includes content distribution and management, broadcast video and even digital signage solutions. To facilitate this move, AT&T has cut strategic relationships with ExendMedia, Qumu and Stratacache; ExtendMedia provides digital content services software, Qumu is a software company that enables organizations to easily capture, manage, publish and distribute live and on-demand video content while leveraging existing IT infrastructure, while Stratacache is a software and services company that provides both multi-platform software and appliance based technology for the delivery of rich media applications on a distributed WAN or Internet/intranet powered enterprise.

AT&T is bragging of nearly $70 million in network infrastructure and development by year end to support its digital media capabilities across the U.S., Europe, and Asia. Once the software expertise of ExtendMedia, Qumu, and Stratacache are integrated with its own capabilities, AT&T expects to offer companies one-stop shopping and simplified network-based solutions to encode, deliver, manage and support video and multimedia files.

For more
- AT&T announces new CDN Services, EVP Martine

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AT&T Pumps CDN at SME

Doug Mohney — Thu, 22 May 2008 21:57:34 -0400

This week, AT&T was busy courting customers of all sizes at Streaming Media East to use their streaming content delivery network. Forbes.com showed up to deliver a customer testimonial; the heavily trafficked site uses AT&T's hosting and streaming service in NYC.

Forbes.com publishes more than 2,500 stories a day and creates video from studios in New York, San Francisco and Hong Kong. The web site gets more traffic on its people-ranking lists than the Super Bowl site on Super Bowl Sunday, according to Forbes.com VP and GM Michael Smith.

When pressed, AT&T representatives wouldn't talk about the number of customers the company has signed up for its streaming service; AT&T has launched streaming on several occasions.

However, AT&T's reluctance to speak this week hasn't stopped Goldman Sachs from dropping the company's entry into the CDN market. AT&T has a "vast captive" customer base and adding CDN services to the company's existing network infrastructure should be of "relative little" marginal cost. Goldman notes there are close to 40 CDN service providers, many of whom have started services in the past year (Ed.--Many of whom will likely end up closing their doors or merging with other players in the next three years)

For more:
- Streaming Media reports on AT&T's streaming CDN push.

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