CDN Storage as a Selling Feature

Once upon a time, storage was a profitable product feature for CDNs. A few years back, CDN storage rates were in the range of $.15/GB to $.75/GB, depending on the volume. It would be normal to see CDN customers paying $200/month for 1TB of storage. That wasn’t much in billings as an individual account for a CDN, but when you added all the storage used by all customers of a CDN, it was a significant revenue stream. If the average customer paid $.20/GB, and a CDN had 1PB of storage in total – that translated into $200k in monthly recurring revenue. Then one day, all of a sudden, the profitable product line of CDN storage came crashing down, with the arrival of Amazon Simple Storage (S3).

CDN Storage is a Commodity 

Amazon commoditized storage so much, that CDN storage is no longer a strategic selling feature that generates significant revenue, as it once did in the past. The CFO of Limelight Networks confirmed this trend on the 2nd quarter earnings call stating that storage didn’t perform as expected. Today’s CDN storage prices range anywhere from $.022/GB to $.15/GB, depending on the volume. Is there a difference in the quality of storage offered by S3 and CDNs? Absolutely. The CDN storage infrastructure is much higher quality than S3, therefore a small premium is charged. Storage from the likes of Akamai and EdgeCast have never crashed on the scale of S3, and probably haven’t crashed for many years, and there is a reason for that.

CDN Storage vs Simple Storage (S3)

Some CDNs use Tier 1 storage such as Isilon and Data Direct Networks (DDN) that are faster, more stable, and proven, compared to S3. However, that doesn’t mean every company needs premium CDN storage. For some, it comes down to the budget, and for others, redundancy and performance are priorities. Fortunately for many, hardware storage vendors responded to Amazon, and dropped hardware storage prices significantly. The media industry has benefited from the hardware price reductions, because many studios, broadcasters and post production houses have PB’s of storage. Regardless, if its CDN storage, S3 storage, or Isilon type storage, the storage options are plentiful. Here are some price comparisons between cloud storage and hardware storage for 1PB of storage.

 Cloud Storage Prices for 1PB
  • Amazon S3: 1PB x $.0228/GB = $22,800/mo. X 12 months = $273,600
  • Azure Storage: 1PB x $.022/GB = $22,000/mo. x 12 months = $264,000
 Estimated Prices for 1PB of Disk Array Storage
  • EMC Isilon: $400k to $500k
  • Data Direct Networks: $400k to $500k
  • Custom Storage: $350k to $375k