The Four Disruptive Periods in Content Delivery

Disruptive technologies and trends continue to transform the CDN business model. At the same, these disruptions usually usher in the creation of new CDN startups that come up new ways of optimizing, securing and delivering content. Three identifiable CDN periods are in play today, and they relate to video, security and RAN. The video streaming industry is commoditized, security is maturing, and the RAN period has just begun. One question now is what period is after RAN – that will result in the creation of new CDN business models? We’ll find out for sure in the latter part of 2017, once the innovations in wireless /wireline technology come to fruition. Let’s briefly analyze the last three periods.

1st Period – Video: The introduction of the iPhone, iPad and Android was a cataclysmic event for CDNs, wireless carriers, and media companies. Anyone involved in content creation and delivery was impacted. The biggest winners were Apple and Google, as they wrestled control away from the trillion dollar wireless industry. Apple and Google created an avalanche that will eventually turn wireless networks into dumb pipes. For CDNs, their global platforms required expensive upgrades, in order to support new protocols and services like HLS, HDS, transmuxing, cloud encoding, and so on. Today, this period is stable, the technology has commoditized, and there are literally hundreds of established companies catering to this video streaming ecosystem.

4 Periods of CDN Disruption

2nd Period – Security: The next period was forced upon the CDN industry, as highly intelligent adversaries started to attack the Internet infrastructure, en mass a couple of years ago. DDoS attacks, web application attacks and multi-vector attacks have reaped chaos on corporations, government agencies and consumers around the world. At first, CDNs were slow to respond to the threat, but once they did they ushered in a new era of the security-focused CDN. Whereas video streaming is a low cost and low margin business requiring high volume data transfer to make a decent profit, security is the opposite. Security is complex, expensive, and the engineering talent is hard to come by. From Akamai at the edge, to FireEye behind the corporate perimeter, there are dozens of features that a CDN can invest in, in order to offer a differentiated service. Today, this period is in growth mode, and we’ll be for the next few years before commoditization sets in.

3rd Period – RAN + GPON: 4G, WiFi, 5G, GPON, Cloud RAN, and the innovations in the wireless/wireline last mile marks a new era in carrier psychology. Previously, telcos innovated at a snail’s pace, but now they’ve caught up to Google. Gigabit connectivity to the home and small business is being implemented in the tens of millions across the globe. With so much bandwidth available to end users, soon we’ll start to see new applications in the realm of gaming, virtual reality, native video streaming, remote healthcare, and so on. The CDN RANs are in a great position to ride this wave out to new fortunes. This period began in 2015, and will play an important part of high bandwidth last mile access for many years.

4rd Period – Ubiquitous Internet Bandwidth: This period is likely to start in the latter part of 2017, as the technology experiments in wireless/wireline industry go from the R&D lab to deployment. 5G, Next-Gen GPON, Next-Gen WiFi and all other broadband innovations will create a cataclysmic shift in the CDN business model. Just as cloud compute and cloud storage race to zero cost, and wireless networks become dumb pipes, ubiquitous Internet bandwidth begins in this period. The timing is perfect, because it’ll accelerates the adoption of high-definition video streaming, virtual reality, 3D gaming, IoT, remote healthcare, and so on.

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