SDN+CDN & Rethinking the Network Operator Model

Comcast

Comcast built a CDN platform from scratch using open source software like Apache Traffic Server, and commercial products like Splunk for logging and analytics. In addition, they built their own Content Router for content distribution. From start to finish, the project took less than a year, which is a time-to-market success. One of the reasons they decided to build their own in-house CDN is because they wanted “no vendor or system lock-in”.

Hewlett-Packard

Nigel Upton, previous GM for HP and responsible for working with the Telco vertical once stated that “I don’t believe, and certainly everything we’re seeing that the stand alone CDNs players will survive long term because the last mile is controlled by the Operator. And the Operators will control that”. The Telco vertical is a $7-$8B business for HP, and they helped Telefonica launch their CDN. Other interested things Nigel went on to say:

  • Telefonica was HP’s largest customer
  • HP works extensively with Tier 1 Network Operators around the world
  • HP has talked to 50-70 Operators and the first item that comes up most often is cost reduction in the network and monetization
  • Operators can reduce cost by implementing caching, web acceleration and CDN technologies
  • Tier 1 Operators totally missed the boat on the first wave of content and video monetization, letting companies like Apple and CDNs monetize the delivery of content, which rides for free on the Operator’s networks that cost billions of dollars to build

Netflix vs Transparent Caching & License CDNs

Network Operators (AT&T U-verse, Verizon Fios, BT TV, live Orange TV…) are the largest group of CDN customers, whether they license CDN software from Akamai, EdgeCast or Limelight, deploy transparent caching solutions  from Qwilt or PeerApp, or build their own like Comcast.  Two major concerns for operators are cost and vendor lock-in. In 2015, this will change, courtesy of SDN+CDN.

Global Top Telecommunication Companies
Telco
Country
Market Cap
China Mobile Hong Kong $236B
Verizon USA $194.2B
AT&T USA $170B
Vodafone UK $92.2B
Ameria Movil Mexico $74.6B
Telefonica Spain $74.4B
Softbank Japan $72.8B
NTT Japan $59.98B
Deutsche Telekom Germany $58.8B

 

SDN+CDN in the Operator Network

Some Tier 1 Operators have tens  of thousands of video assets in their libraries, which are delivered daily to millions of set-top boxes and mobile devices. Telefonica, BT, DT, NTT, Verizon, and hundreds of Operators all over the world deliver video over some form of CDN. In 2014, Operator choices for deploying CDN technology were limited and costly. The four choices available:

  • Use a CDN
  • License the CDN Software from a 3rd party CDN like Limelight and build your own
  • Deploy Transparent Caching solutions from vendors like Qwilt or PeerApp
  • Build a CDN from open source software like Comcast

in 2015, there will be another option available to Network Operators, SDN+CDN. Some pure-play CDNs we’ve talked to are willing to license their entire CDN technology stack for $10M, give or take a few million, where the Operator pays one fee, deploys the proven CDN network via SDN/NFV/Virtualization, and their off to the races. Benefit: Operators own all of the source code and tools, giving them the ability to customize the platform for their environment. There is no vendor lock-in, and there is no need to buy an actual CDN, but only a virtual instance of the CDN delivery infrastructure. If Network Operators want a Netflix like platform, deploying a full scale CDN is almost a must.

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