Recently, CDNify, a pure-play CDN based in the UK decided to abandon the CDN-in-a-box solution from OnApp. One of CDNify’s challenges with OnApp revolved around POP responsiveness, in that some POPs were not as responsive as others. For a CDN, that’s a no-go. But that’s what happens when you piece together dozens of hosting companies, and glue them together to create a global CDN network. However, the bigger issue at hand, had to do more with expectations. CDNify expectations were off, and now their updating their business model as we speak for the new reality.
CDNify noted that the CDN business was extremely competitive, and it was hard to create a CDN experience, and feature set that was different from the competition. We agree, the CDN business is extremely competitive. However, creating differentiation is no harder in the CDN business, than creating differentiation in other businesses. There are successful CDNs that started small, grew to a decent size, and sold off for hundreds of millions of dollars. In fact, there are a few CDN startups today that are extremely successful, and one them happens to be Instart Logic.
Instart Logic vs CDNify Business Model
Instart Logic, the up-and-coming CDN backed by Andreessen Horowitz and Greylock Partners, made a splash in the CDN industry from day 1. They are not a typical run-of-the-mill CDN offering all the bells and whistles of Limelight or Akamai. Instead, they are focused on one important area of the CDN feature set, investing all their resources in this one area that they call Web Application Streaming. That is how Instart Logic has differentiated themselves in the crowded CDN market. Instart Logic is focused, and CDNify was not.
Instart Logic really gets the CDN business. In my view, Instart Logic has done a better job in the CDN business than Cotendo. Everything surrounding Instart Logic is powerful, from its marketing message, to the feature set, to the executive staff. The best part is the marketing. They have created their own CDN language for the traditional CDN services, such as Web Application Streaming, Image Streaming, AppSequencer, and so on. It seems that Instart Logic took a page out of EdgeCast’s playbook, creating cool catchy names around its features set. Here’s a little secret, just because a CDN starts off in one area of specialization, doesn’t mean they have to stay in that area forever. Later on that CDN can start to expand their services, and start offering customers a more extensive feature set.
If a CDN can’t find one area of specialization to succeed in, how does it expect to succeed in offering the entire CDN feature set that puts it in direct competition to Akamai, Limelight and EdgeCast. This is the era of CDN specialization. Any company pondering about entering the CDN industry is wise to pick their poison, and focus in that service subset becoming the best at it. Thereafter, gradually grow the feature set.