CDN Nugget #3

Refining the Business Model

Aryaka Networks is the global leader in WAN as-a-service, Network as-a-service and WAN Optimization as-a-service. They were the first-to-market with this offering, and have done a decent job maintaining their leadership position. Akamai took notice and decided to enter the B2B CDN space, via a partnership with Cisco that goes after the same type of customer. Whether this goes anywhere or not, time will tell. In addition, Aryaka is now in the CDN business, with its main differentiator being that its CDN traffic runs over a private core network, as opposed to a public shared network. The major benefit of a private core network is that many middle mile congestion problems associated with running TCP-IP/BGP/Anycast are avoided.

Being the curious creatures we are, the big question is why did Aryaka Networks decide to go to market with WAN as-a-service as opposed to MPLS as-a-service? The same question can be posed to other start-ups, why do they select a certain direction over another. When talking to entrepreneurs, this question leads to the most interesting conversations because we get to hear the backdrop of how the idea was created and turned into a product. At the same time, B2B ideas need to be debated extensively, as there might possibly a better go-to-market strategy at launch.

In regards to WAN as-a-service vs MPLS as-a-service, the latter might resonate more with MPLS customers, especially since they are the folks within IT departments that are the most resistant to change when it comes to replacing one WAN topology for another. Yes, MPLS might take 3 months to install but all MPLS customers I’ve come across usually plan 6 months in advance before their MPLS contract expires. In regards to MPLS pricing, I’ve seen instances when pricing for MPLS port & loop was identical to Internet port & loop pricing, which is required for WAN as-a-service. Conclusion: the benefits of the time to install and cost savings associated with WAN as-a-service are muted. Usually, its better to know these things up front, than later in the business life cycle. Fortunately for Aryaka, they have a dynamic business model that continues to evolve over time.

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