CDN fragmentation to be resolved by network functions virtualisation

Joseph O'Halloran | 13-09-2013

Content delivery network (CDN) vendors are beginning to invest in Network Functions Virtualisation (NFV) technology in a bid to transition business models from hardware-centric to software and service-centric.

According to ABI Research’s Cloud Video and Video Hardware Research Service, the CDN market is evolving into multiple different but related markets around diverse business needs.
This is being driven by over the top (OTT) firms such as Netflix delivering sufficient content to justify building their own international and cross-network CDNs, while major service providers such as AT&T, Deutsche Telekom, and Comcast now have both in-house CDNs around their own content, as well as leased CDNs to provide to customers.
Overall, ABI believes that video delivery is responsible for about 46% of the total CDN market, which includes website acceleration for e-commerce, software downloads, enterprise, education, and government services. ABI predicts the service CDN market for premium video to grow from 1.2 billion in 2013 to 2.8 billion by 2018 at a CAGR of 17.8%, with the hardware CDN market for video services expected to grow from 1.0 billion to 1.7 billion (CAGR 11.8%) in the same timeframe.
“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,” explained 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 Virtualisation (NFV) in the long-term which can allow CDNs supporting multiple business cases to flexibly share a common hardware platform.”