The Industry That Powers The Internet: Crazy Growth, Big Changes Coming For The CDN

Bringing content to an Internet connected device near you. As the Internet grows and changes, so does the CDN, the system responsible for serving much of its content to users. What’s next for this booming industry?

The State of the CDN

The CDN market is growing, and fast. This is largely the result of companies trying to keep up with ever increasing richness of content and device diversity. According to Markets and Markets, the CDN industry is expected to grow more than 26% a year and become a $12 billion market by 2019. As Jim Davis, a senior analyst at 451 Research sums up the market, “We’ve moved from static Web pages to highly evolved Web applications that incorporate code from multiple sources, from postage stamp-sized video to streaming video that’s displayed on HDTVs in consumers’ homes.” To deliver these services well, companies turn to CDNs.

CDN Growth To Continue Meteoric Rise

As the trends of content growth and increased richness continue to take off, many companies are looking to improve their own services by partnering with CDNs that offer more data-centers, closer nodes and lower lag times. While some companies have built their own CDNs (Amazon, Apple, Google and Microsoft) this still isn’t a reasonable solution for most companies seeking to meet consumers never-ending demand for more content that is richer, more dynamic and loads faster.

"Whereas CDNs were an adjunct of the Internet just a few years ago, today CDNs are the network, accounting for more than half of all consumer Internet traffic” - says Craig Labovitz, cofounder and CEO of DeepField

Recent Trends

The CDN industry has changed dramatically in recent years. The single biggest thing that has happened in the industry and forced so much change is the addition of countless new vendors.

“It used to be that Akamai was synonymous with CDN, but the market saw a dramatic number of new entrants between 2008 and 2012” - according to Mark Grannan, an analyst at Forrester Research

In order to differentiate themselves and reverse the commoditization of the CDN industry, the new networks specialized. Some focused on certain types of media, specific geographies or other categories.

The Cloud. One Of Many CDN Services Offered

Knowing that they can no longer just rely on transferring data quickly, some bigger CDNs have been using frictionless onboarding processes in an attempt to remain at the forefront of the content delivery industry. These sales tactics have been packaged with other, non-traditional CDN products, including cloud services, security solutions and advertising delivery, to create a newer, fuller selection of services. Many of these complimentary services have been acquired through M&A campaigns. Akamai's recent acquisiton Xerocole is but one example of this trend.

The Future - The Video Streaming CDN

In 2015, one big issue to be reckoned with is video streaming. Video is increasingly being viewed as the big topic this year. In 3Q 2014, Akamai saw “unseasonably strong” demand for media and its revenue in the sector grew 22% y-o-y. Rob Malnati, a Vice President at Cedexis, recently commented that, “video growth was on the order of 30 percent.” This trend will likely continue for some time as CISCO predicts that,

“Globally, IP video traffic will be 79 percent of all IP traffic (both business and consumer) by 2018, up from 66 percent in 2013.”

But CDNs generally work best when content is cached. This means that CDNs can be very helpful for streaming videos on demand, but can struggle in live viewing situations. In fact, one huge problem in the industry is that no one offers high quality live streaming services.

So, how will CDNs deal with these video traffic and live streaming issues? Tim Siglin, chairman of Braintrust Digital, suggests that as a result of video streaming needs we, "may see the re-emergence of peer-to-peer technologies… it’s possible that a tightly constrained version of peer-to-peer might gain traction in 2015." He believes you should keep an eye on premium content market, “especially around the National Association of Broadcasters show... Not only will more companies enter the fray with innovations around delivery, but we should also [see] some interesting movement toward addressing a broader overall market.”

At Peer5, we are building a solution for exactly these problems. Our P2P CDN solves the vexing video delivery problem in both on demand and live streaming situations, where many other delivery networks struggle. We use WebRTC, a technology experiencing rapid adoption, to help user’s computers connect in browser. Our P2P mesh has been proven to improve user’s viewing experiences and minimize rebuffering instances, all while offloading bandwidth from servers. Click here to learn more.