New commentary out of ABI Research indicates that the network functions virtualization trend could somehow unify the currently fragmented CDN marketplace, although this reporter is unclear on exactly how that might work.
In any case, the research firm talks about how several types of companies either offer content delivery network solutions to others and/or own their own CDN infrastructure. That includes CDN service pioneers Akamai, Level 3 and Limelight; and AT&T, Comcast and DT, which leverage CDN both internally and offer it as a service. ABI also mentions that companies like software giant Microsoft and over-the-top video provider Netflix deliver enough content to justify their own CDN builds, and that major network infrastructure suppliers are working to move from equipment-based to services-based business models.
“Owned CDN vendors such as Cisco and Ericsson are looking at how to transition their business models from hardware-centric to software and service-centric business models, while Amazon Web Services and Microsoft Azure Media Services have a slight lead on cloud distribution of video,” according to ABI Research practice director Sam Rosen. “Operators, meanwhile, are looking to open source CDN technologies to reduce the upfront costs and vendor tie-ins for the short-term, while they are investing in Network Functions Virtualization (NFV) in the long-term which can allow CDNs supporting multiple business cases to flexibly share a common hardware platform.”
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According to ABI, the service CDN market for premium video will grow from 1.2 billion in 2013 to 2.8 billion in 2018 (CAGR 17.8 percent) while the hardware CDN market for video services will grow from 1.0 billion to 1.7 billion (CAGR 11.8 percent) in the same timeframe. Video delivery accounts for 46 percent of the total CDN market. The research firm also said it includes website acceleration for e-commerce, software downloads, enterprise, education, and government services.
As for NFV, Doyle Research expects this market to gain momentum with early use cases during 2014 and forecasts the market – including software, servers, and storage – will reach approximately $5 billion by 2018.
NFV has to do with virtualizing specific aspects of the network related to functions like deep packet inspection and the HSS, as two examples. More information on NFV will be covered at Software Telco Congress Nov. 19-21 in Santa Clara, Calif.
As stated above, this is expected to enable service providers to benefit from cost savings resulting from the use of industry-standard servers. Another expected benefit of NFV is that it will allow service providers to more quickly introduce new services and capabilities leveraging such infrastructure.
AT&T, BT Group, Deutsche Telekom, Orange, Telecom Italia, Telefonica and Verizon got the NFV ball rolling last year with the creation of an NFV group within ETSI and the publication of a white paper on NFV.
Executive Editor, TMC
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