Over the last month, about a handful of European CDNs have shown a great interest in expanding to the US market. It makes total sense, since many US based CDNs have expanded into all large European cities, and have succeeded there. Why do the European CDNs want to enter the US market? Two reasons. First, the US CDN market is the largest in the world. If a non-US based CDN can thrive in the US, they can thrive anywhere. Second reason, bragging rights. There hasn’t been 1 European or APAC based CDN that has been successful in the US. And I don’t count those CDNs having several dozen US based companies billing $25/month.
My first response to the European based CDN that wants to expand into the US market is “don’t do it”. The US CDN market is ferociously competitive. It involves lots of risk, and requires precision decision making in all aspects of the business, including sales, marketing, operations, engineering, and so on. Lets not forget a certain minimum investment is required to expand infrastructure. If its really hard for a US based CDNs to succeed here, image how much harder it is for the European CDN. However, if the European CDN has a innovation driven CDN platform, with a killer feature set, and many customers around the world, and some cash to splurge, then here are some ground rules to follow:
Recommendations for Expanding to the US Market
- Staff: At a very minimum, the CDN will need to invest at least $2M in U staff, to hire sales, sales engineer, tech support, and marketing
- POP Count: European CDN need at least 7 – 10 POPs in the US to level the playing field with US based CDNs. POPs don’t have to be massive. They can be one cabinet with servers, couple of routers, Arista switch, and that’s it. It’s all about perception, and no one needs to know how big the POPs are. Just being able to say a CDN has 10 POPs in the US goes a long way perception wise
- Sales Team: A sales team with 1 or 2 reps in LA, Silicon Valley, NY, Miami, Dallas, and Seattle. There doesn’t have to be an office in every city, remote sales reps work
- Sales Engineer: 1 US based sales engineer (SE) is needed that can talk the talk, and help customers with setup
- Tech Support: Employ 3-4 tech support folks that can answer the phones when customers call. The 5am to 10pm PT work schedule is good enough, and then have the overseas NOC provide support after hours
- Marketing: CDN should hire a dedicated US based marketing person that can write brochures, update the website, post on twitter, Facebook, set up the trade shows, and so on. Sorry, but marketing departments based in other countries does not work, period. Marketing guru can be a fresh college graduate with a couple of years of experience in social media, and that has impeccable writing skills
- Sales Team Makeup: hire at least 2 senior level CDN sales reps who have worked for different CDNs. They can be the shift leaders that close deals, and train the hungry rookies
That’s it for now folks.