What’s The Next Billion Dollar Market for CDN Industry

Three years ago, when we first started, it took us a few months to figure out what would become the next big market for CDNs. After researching and publishing research on various business models, we figured that Edge Security would be the next big thing. Fast forward to the present, and Edge Security is the biggest opportunity that has ever existed for CDNs, eclipsing the video delivery ecosystem. In fact, it can be said that Edge Security saved the Akamai business model. The downside, creating Edge Security services is infinitely more complex than anything else invented beforehand. With that being said, what is the next big billion dollar market opportunity for CDNs? That’s easy, it’s the Edge Compute CDN (EC-CDN) model. The EC-CDN model turns the “EC2 + Lambda@Edge + AWS Step Functions” model on its head.

EC-CDN model is going to be a game changer for CDNs. First, it’s going to transform how CDNs make their money; instead of making money from transit in the form of data transfer, the EC-CDN model makes money by charging per hour of processing just like EC2. However, the EC-CDN model is best for one target market – dynamic web applications. The EC-CDN model does not work for data warehouse, ERP, OLTP and similar applications. EC-CDN will render many intra-CDN delivery useless, as well as DSA, Lambda@Edge, and much more.

EC-CDN = Application Logic + Database + Data at the Edge

What exactly is EC-CDN? EC-CDN is the idea of having application business logic + database + data residing at the edge, not in Availability Zones. Thus, the CDN will place caching servers and application logic + database + data, at the PoP. The processing of request/response will take place at the last mile, not over the first-mile + middle-mile + last mile like it does in the AWS ecosystem. The delivery of dynamic content from the edge, without ever having to go back to origin, is the future. Available open source software is the enabler of such an Edge Compute  CDN Platform.

Why doesn’t AWS do this? The biggest problem with AWS is that it’s trying to be all things to all people. It’s now a decade old platform, which qualifies as a legacy platform. Hundreds of services have been built on top of the legacy EC2 environment. It’s extremely confusing, too complex, too technical, and it’s ripe for disruption. Change the basic architecture of application logic + database + data flows and EC2 falls flat. AWS is a legacy platform that mimics the business model of Microsoft and Cisco a decade ago, back when quoting a product for the enterprise required hundreds of part numbers.

AWS is a mass customization model, similar to Akamai a few years back. Eventually, highly focused and highly specialized startups will change the model, and break it apart. In this case, the way compute and acceleration is done will change at the edge. In order for AWS to become an EC-CDN player, it will have to revamp its massive architecture, an incredible undertaking even for Amazon. Karma is in sight, just as Amazon invaded the CDN ecosystem with CloudFront and S3, CDNs are going to invade the cloud compute space of AWS.

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