Judging from the buzz at this year’s CDN World Summit, CDN federations are a hot topic—and not just because they were the focus of my keynote. In short, the industry has moved beyond “if” and is now talking about “when” and “how.” This is good news because I believe CDN federations will play an important role in creating new opportunities for service providers to monetize their services.
As consumers demand greater amounts of high-quality content for their in-home and mobile devices, service providers (SPs) are finding it difficult to increase revenues while containing costs. In response, many SPs have implemented their own CDNs to reduce content-transport costs and improve the quality of content delivery to customers. While this approach has helped, results have been limited.
This is because content providers would rather work with fewer companies for delivery of their end product than have separate contracts with individual SPs that provide the necessary distribution footprint. Given this, SPs are now exploring the potential of CDN federations, which I defined in my talk as multi-footprint, open CDN capabilities built from resources owned and operated by autonomous members. CDN federations will allow SPs to provide Internet-wide CDN services rather than being limited to the reach of their own networks.
Due to the benefits for SPs, content providers, and consumers, Cisco is involved in a number of CDN-related initiatives to accelerate the move to CDN federations. In addition to subject-matter experts co-chairing a CDN Interconnection working group at the IETF, Cisco has started working with several leading SPs worldwide to plan, deploy, and test an open CDN federation pilot. This project defines both the business and technology requirements needed to make CDN federations a reality. The pilot has also encompassed live trials that involve multiple vendors across several continents.
Judging from the questions I received after my presentation and discussions with industry executives, the next step in making CDN federations commonplace (in addition to the Cisco CDN pilot I just discussed) is to facilitate an open dialog between SPs and content companies. This will allow them to better understand each other’s issues in order to define the models and services that will meet content companies’ needs, while enabling SPs to monetize the content traversing their networks.
From an SP perspective, it will be important to start thinking beyond their own networks. This means moving past simple caching to deliver value-added services such as authentication, transcoding from their networks, customer service, and billing that will allow content providers to monetize their digital assets regardless of where the content is consumed. SPs must also be able to play the role of a CDN subcontractor when another SP is in the position of being the prime contractor with a content company. The good news is that SPs have what content providers need, and CDN federations will help make the delivery of these services a reality.
CDN federations are good for the content delivery industry. By increasing competition for content providers’ business, both pure-play and SP CDN providers will work hard to improve their services and add more value to compete with each other. As consumers continue to demand greater amounts of high-quality, “anytime-anywhere” content, there is room enough for everyone to participate and prosper.
To learn more about Cisco’s work to move CDN federations from a great idea to a market reality, read our newly published paper: http://www.cisco.com/web/about/ac79/docs/sp/CDN-PoV_IBSG.pdf.