Is the CDN Market Highly Commoditized

Over the last few months, there has been much press about CDN commoditization and what it means to the industry. Even Forbes published an article titled “Limelight: Trying to Drive Sales in Brutally Competitive Market“. Today, we are going to answer that question. Is the CDN industry a brutally competitive market? It really depends. The CDN market is brutally competitive when comparing it to the luxury watch market, market for airplane engines, and cola drinks. However, when we compare it to other technology sectors, it’s not. In fact, it’s just the opposite. What are some brutally competitive segments in technology?

Extremely Competitive Segments
  • Cloud Compute by the hour: AWS, Google, Microsoft, Softlayer, Rackspace, Leaseweb, and many more
  • Cloud Storage: AWS, Google, Microsoft, Softlayer, Rackspace, Leaseweb, and many more
  • Personal Cloud Storage: Dropbox, Box, and dozens more
  • MPLS: AT&T, Verizon, Zayo, Level 3 and dozens more
  • Voice, Long Distance, SIP: AT&T, Verizon, Zayo, Level 3 and dozens more
  • Internet Access: AT&T, Verizon, Zayo, Level 3 and dozens more
  • 10Gbps Waves: AT&T, Verizon, Zayo, Level 3 and dozens more

All sectors mentioned above are extremely competitive where nickling and diming usually means winning. The CDN industry is nowhere near as competitive. Next, let’s throw in the CDN feature set: token auth, shared SSL, dedicated SSL, DSA, WAF, FEO, DDoS L3/4, EV Certs, DDoS L/7, login protect, advanced bot protection, continuous malware scanning, dedicated PCI compliant network, small file delivery platform, large file delivery platform, mobile detection & redirect, advanced reporting, streaming log files, web app logic at CDN edge, and dozens more.

The CDN feature set is extensive, and its not something that one would associate a brutally competitive market with. Finally, lets not forget that each end user vertical whether its eCommerce, VOD, banking, social, or whatever, requires a combination of the above features, where each feature price is highly customizable – these are all the signs of a healthy CDN market. Conclusion: When we put together all of the above, where players are a very innovative bunch that continue to push the envelope, as evidenced by the feature set, these are not indicators of a brutally competitive CDN market.

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