In this quarter, there have been no industry-impacting events. However, it’s still early. The two top surprises involve Bunny.net and the maturing serverless market report.
Bunny.net, the European CDN startup, has raised $6 million in Series A funding. Dejan Pelzel is the founder, and he bootstrapped the company to $MM in ARR and 24,000 paying customers. Their feature set is on par with other industry players of that size. It’s unclear in the article, but it seems they plan to compete more aggressively in the US market.
What kind of impact should we expect? In the US, none. Cloudflare is the industry leader in the US SMB market. No startup is yet able to challenge them. The Cloudflare hybrid PLG and sales-led growth model is the industry’s best and one of the reasons they have continued to grow at a +50% clip quarter over quarter for the past few years. However, Bunny.net should be able to use the capital to capture market share in Europe and APAC. LatAm is a different animal.
- Company: Bunney.net
- Founder: Dejan Grofelnik Pelzel
- HQ: Ljubljana, Slovenia
- Founded: 2015
- # of Employees: ~35
- Product: Traditional CDN
Serverless Usage Dropped from Q3-2020 to Q1-2021
SlashData, commissioned by the CNCF, surveyed thousands to understand current trends among edge and backend developers. The report (although a bit dated) offers insight into the container, Kubernetes, serverless, and edge computing ecosystems.
One interesting data point in the report shows that usage of serverless technologies has dropped among all developers from Q3-2020 to Q1-2021 for unknown reasons. Thus, contrary to some beliefs, serverless is not growing year over year as initially thought. One caveat, though, is that the report is a generalization of the cloud-native community (not the CDN industry).
Now, the real question is whether serverless in the CDN industry, specifically edge functions, FaaS, and the various runtimes, reached its pinnacle in driving new revenue into vendor coffers. Based on our observations, the answer is no. Edge functions are only a piece of a much broader portfolio that includes databases, object stores, etc.
Deno, Oven, and Fly.io
Deno, Oven, and Fly.io are three new players in the CDN ecosystem. Although they are not technically a CDN, they do compete with Cloudflare, Edgio, Akamai, and Fastly in some areas.
Fly.io is an entirely different category. They are the first company to offer a container platform that is CDN-like in performance and ease of use and solves the problem of quickly deploying containerized applications and databases at the edge.
Akamai is the only other vendor with something similar but not as innovative.
Momento, founded in 2021, is a startup that describes itself as a serverless cache. The platform accelerates databases (DynamoDB, Google CloudSQL, Postgres, etc.), object stores, edge functions, and machine learning workloads.
The software cache is based on Pelikan, the rust-based product developed and open-sourced by Twitter. However, the startup’s platform has been optimized to run on Arm-based processors; specifically, the Google Tau T2a VMs powered by Ampere processors; more on them later.
- Company: Momento
- Founders: Khawaja Shams (CEO) and Daniela Miao
- Founded: 2021
- # of Employees: ~28
- Product: Serverless Cache
Akamai Expands Linode
Akamai has announced that it is expanding Linode data centers and technology stack across twelve data centers in 2023, including North America, LatAm, Europe, and APAC. In addition, more locations will be added in areas like Sao Paulo and Osaka. The exact number of PoPs that will be launched in the immediate future is in the works.
Ampere Computing is a semiconductor company that started in 2018 and is disrupting the market for data center processors using Arm-based technology. On a scale of one to five, with five being the most disruptive, what they are doing is a five. According to one estimate, there were eight failed attempts to introduce Arm-based processors into the data center market, and Ampere has overcome many challenges that others were unable to.
Hyperscalers such as Google, Microsoft, Tencent, Tiktok, and Oracle are all in on Ampere and have deployed it and created solutions based on the technology.
Ampere has two cloud-native processors—the Arm-based 80-core Ampere Altra and the 128-core Ampere Altra Max. One of the key benefits is low power consumption. The company claims its processors are faster than Intel and AMD. One estimate from the company, Ampere processors are 1.5 times faster than AMD at half the power. Decreasing energy efficiency in the data center environment has been the mantra for years in the data center space.
Cloudflare decided to employ ARM-based processors in the CDN industry in its global infrastructure. Initially, they partnered with Qualcomm, only to get the rug pulled from beneath them when Qualcomm exited the business. After that, they started working with Ampere to design processors that could meet their needs.
- Company: Ampere Computing
- Founder: Renee J. James (CEO)
- HQ: Santa Clara
- Founded: 2018
- Funding: $426M
- # of Employees: +937
- Product: 64-bit Arm processors for data center/cloud servers
VPUs for Encoding
Talking about hardware, NETINT Technologies, another manufacturer founded in 2015, has developed an ASIC-based hardware encoder that plugs right into a PCIe slot that runs NVMe. The encoder is a VPU (Video Processing Unit) that supports X86 and Arm-based architectures and H.264, AVI, and HEVC.
One cool feature is the VPU comes with two DNN (deep neural network) engines that can be used for object detection and classification. AI processing engines address a whole new set of machine learning use cases.
- Company: NETINT Technologies Inc.
- HQ: Burnaby, BC Canada
- Founders: Alex Liu and Tao Zhong
- Funding: Series A
- # of Employees: ~99
- Product: Manufacturer H.264, HEVC, and AVI ASIC-based hardware video encoders