Are CDN prices really dropping year over year?


Are CDN prices dropping year over year? Are CDN services a commodity? Even if Akamai and Limelight report that CDN services are dropping by “x” percent every year, does that reflect the entire CDN industry? First, let’s address the question commoditization, are CDN services a commodity? It was a few years back, but it’s no longer a commodity. Many CDNs are creating and selling premium features at premium prices, where the latest features incorporate big data, virtualization, wireless last mile acceleration technology, enhanced security services and SDN. These innovation-based CDNs are slicing and dicing the overall CDN market into segments, where CDN offer a unique set of services, where other CDNs are weak.

When it comes to selling CDN services, the CDN-to-Customer conversations are long longer about “we need pricing for 100TB/month, what’s your lowest price”. The conversations are about “so you need 100TB/month, do you need WAF, Token Auth, Dedicated SSL Cert, DSA, ADN, Mobile Device Detection, Rules Engine, DDoS Mitigation Services, PCI Compliant Network, Advanced Reporting, Real Time Reporting, Login Protect or Two-factor Authentication with that?” Thus, every company is going to have a different set of needs that requires a different set of non-commodity features. Conclusion: CDN market is not a commodity service any longer.

Are CDN Prices Dropping Year over Year

When Akamai and Limelight Networks report that CDN prices are dropping across the board year over year, does that mean prices are dropping for the entire CDN sector, even though these two CDNs represent the lions share of the CDN market? That’s debatable. The CDN market is more diverse now, and we have non-public CDNs that are specializing in a subset of CDN services, and offering them at premium prices, sometimes at prices higher than Akamai. Sure, the prices for basic large file delivery are dropping, but that’s the reason most start-up CDNs are offering more than just large file delivery. The prices for small file delivery are increasing because the innovation-based CDNs are providing value added services along with small file delivery that include dynamic content acceleration, FEO, PCI Compliant Network Services, DDoS mitigation and so on. Conclusion: When someone makes a blanket statement about the CDN industry as a whole, and their using metrics of any kind, question it, that its for now.

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