CDN Business Prospects : 2011                 Dr.Ir.Joko Suryana                      PT.LAPI ITB
Outline• CDN Business Intro  –   CDN Players  –   CDN Market Size  –   CDN Market Drivers  –   CDN Existing Services  –   ...
CDN BUSINESS INTRO
CDN Market trends : PlayersThe CDN market is composed by a myriad of players, with different strategies.Number of active p...
CDN Market trends : Market Size• The CDN market  represented around $ 1.6  billion worldwide in 2009  (video and non-video...
CDN Market trends : Akamai
CDN Market trends : Drivers• Growth of Internet consumption and markets    – Good availability and uptime of services (eco...
CDN Market trends : Services• Services around content  delivery value :   – Content Creation       – Delivery System   – C...
CDN Market trends : Barriers• Profitability of CDN business falls off• Unclear business models for significant video provi...
CDN Market trends : Barriers
CDN Telcos : The Reasons• A natural extension of their infrastructure    – Natural players for managing bandwidth issues f...
CDN Telcos : New Revenue Streams
CDN Telcos : Entry Strategy
CDN Telcos : Positioning• Competitive advantages   – Network expertise : Core Business   – ISP business : QoS management  ...
Indonesian CDN : NAP Info• Since 2010, NAP Info have had deployment of numerous CDN clusters• Same rule: traffic ratio req...
Indonesian CDN : Telkomsel• Telkomsel launches CDN on Ericsson, Akamai platform   – “Indonesian mobile operator Telkomsel ...
Indonesian CDN : Telkomsel
Indonesian CDN : Telkomsel• Telkomsel launches CDN on Ericsson, Akamai platform   – In February 2011, Ericsson and Akamai ...
Indonesian CDN : Telkomsel
Indonesian CDN : Telkom• Guna medukung peningkatan bandwidth, Telkom  menyiapkan kapasitas bandwidth gateway Internet  seb...
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Cdn prospects 2011

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Cdn prospects 2011

  1. 1. CDN Business Prospects : 2011 Dr.Ir.Joko Suryana PT.LAPI ITB
  2. 2. Outline• CDN Business Intro – CDN Players – CDN Market Size – CDN Market Drivers – CDN Existing Services – CDN Market Barriers• CDN Telcos – Reason Entering CDN Business – Entry Strategies – Positioning – Indonesian CDN Telcos
  3. 3. CDN BUSINESS INTRO
  4. 4. CDN Market trends : PlayersThe CDN market is composed by a myriad of players, with different strategies.Number of active players in the CDN industry :• Leading CDN are mostly pure • Internet player CDN players – Building internal solutions (Google, – Akamai (US based) Microsoft, DailyMotion, etc …) – Limelight Networks (US based) – e en sol tions third parties – Edgecast, Highwinds – Offering solutions for third- – ChinaCache, CDNetworks in Asia (Amazon CloudFront)• Consolidation in progress within • Equipment and solution vendors pure players also positioning – Panther Express, Velocix – Traditional vendors : Cisco, Juniper, Alcatel- Lucent (Velocix), etc…• Telco CDN – Specialized players : JetStream – Level 3, AT&T leading players for – Ericsson : Mobile Cloud Accelerator backbone with Akamai – BT, KPN most advanced for access
  5. 5. CDN Market trends : Market Size• The CDN market represented around $ 1.6 billion worldwide in 2009 (video and non-video)• Should reach 3.5 billion by 2012 with 28% CAGR• Still not enough – CDN market growth < traffic growth – CDN market growth still limited for an emerging market – Strong price competition
  6. 6. CDN Market trends : Akamai
  7. 7. CDN Market trends : Drivers• Growth of Internet consumption and markets – Good availability and uptime of services (ecommerce players) – E-commerce growing by 15-25% – Online advertising up by more than 10%• Growth of media consumption – Usage itself – HD video (higher bandwidth requirement) – QoS requirements for premium content and live, especially with the move towards connected TV – Involvement of players with revenues outside the online world (broadcasters, DVD rental players, cable providers in the USA etc…)• New screens with the TV set and the mobile phone• New video and QoS technologies – Adaptative streaming technologies• Services and marketing tools – CDN is way more than just traffic• New pricing schemes
  8. 8. CDN Market trends : Services• Services around content delivery value : – Content Creation – Delivery System – Content Platform – Network Delivery – Hosting – Consumption Monitoring
  9. 9. CDN Market trends : Barriers• Profitability of CDN business falls off• Unclear business models for significant video providers (ad-based mostly) – Premium video content already profitable for some players (live events, some catch-up, VOD)• Price wars depress revenue – Intense competition imposed by challengers of Akamai plus new entrants like Amazon and Telcos – 5 to 40% per year Netflix paying as low as 1.5 cents per GB• Content providers launch in-house initiatives – CDN providers could lose important content providers, which contribute a large part of their revenue• Increasingly personalized consumption• Evolution of the nature congestion? – Traffic more local with video? – How to get closer to the user without getting deeper in ISP networks? – Traffic management from ISPs
  10. 10. CDN Market trends : Barriers
  11. 11. CDN Telcos : The Reasons• A natural extension of their infrastructure – Natural players for managing bandwidth issues for web players, as Internet traffic is going through their backbones (Tier 1) and/or their last-mile networks ( ISPs).• Difficulties to monetize their network pipes due to the earlier developments of the Internet. – Services distribution with limited bandwidth costs, thanks to peering agreements. – Low transit prices inherited from the telecom bubble (over-capacity)• Telco to reduce the cost of traffic rather than to generate significant new revenues – Additional OPEX savings – Harsh competition in the short term with pure players – More QoS for the end-users• A few players are still reselling CDN within their wholesale offerings (old practice)
  12. 12. CDN Telcos : New Revenue Streams
  13. 13. CDN Telcos : Entry Strategy
  14. 14. CDN Telcos : Positioning• Competitive advantages – Network expertise : Core Business – ISP business : QoS management for their subscribers – Network tools user : Network equipment improvement benefits – Huge financial power : Acquisitions and data center investments possible• Major issues – Deployment : No existing infrastructure, build from scratch – Business models : Low margins while huge investments – Technical Performance :Offering more QoS than traditional CDN – Net Neutrality : Unclear framework yet on the capacity for ISPs to offer different levels of QoS
  15. 15. Indonesian CDN : NAP Info• Since 2010, NAP Info have had deployment of numerous CDN clusters• Same rule: traffic ratio requirement – Ratio: (Peering+CDN boxes) :Transit=55%: 45%
  16. 16. Indonesian CDN : Telkomsel• Telkomsel launches CDN on Ericsson, Akamai platform – “Indonesian mobile operator Telkomsel has launched Asia- Pacific’s first content delivery network (CDN) solution over a mobile network. Using Akamai and Ericsson’s Mobile Cloud Accelerator platform and Telkomsel’s mobile network, Thomson Reuters is asking its customers in the finance community to pay extra to get its content delivered faster. “ Nicole McCormick/Ovum April 30, 2012 TelecomsEMEA.net
  17. 17. Indonesian CDN : Telkomsel
  18. 18. Indonesian CDN : Telkomsel• Telkomsel launches CDN on Ericsson, Akamai platform – In February 2011, Ericsson and Akamai announced the launch of the Mobile Cloud Accelerator, which provides CDN and caching capabilities using Ericsson’s SmartEdge Border Network Gateway and Mobile Packet Gateway. – Out of a handful of trial customers, Ericsson announced that Telkomsel would launch the first commercial service in February 2012. – Telkomsel’s CDN offering reduces the download time of content by up to 70% compared to downloads from the same content sources without acceleration
  19. 19. Indonesian CDN : Telkomsel
  20. 20. Indonesian CDN : Telkom• Guna medukung peningkatan bandwidth, Telkom menyiapkan kapasitas bandwidth gateway Internet sebesar 123 giga bit per second (Gbps), dengan didukung infrastruktur content deliver network (CDN) Google, Youtube, Akamai sebesar 82 Gbps di Jakarta, Batam, dan Surabaya, serta peering domestik sebesar 32 Gbps.• Telkom sebagai salah satu incumbent telco perlu untuk mengembangkan bisnis CDN ini sejalan dengan perkembangan implementasi GrooviaTV dan nantinya akan lebih berkembangnya layanan OTT (over the top).
  21. 21. THANK YOU

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