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Dan Rayburn posted today on the likelihood (or lack thereof) of substantial consolidation in the CDN space, and I have to say that I think he has the situation exactly right.
The only thing that might happen is a carrier without a CDN might buy one, but that’s not actually consolidation since there are the same number of players before and after. But Dan mentions ‘one of the many telcos who are looking to enter the market’. Dan’s not a carrier/telecom guy so I wouldn’t expect him to delve too deeply there, but I’m not so sure there are so many telcos looking to play in the CDN space right now. Verizon is the only large one I see that might have both the interest and the mojo, the rest of the USA fiber backbones either have a CDN (T, LVLT) or are, for various reasons, not in a position to make a serious effort in a new sector (Sprint,GLBC,XO,SVVS,Cogent). I *suppose* Q might, but it doesn’t feel likely.
3 responses to date ↓
Hi Rob, since some of these telcos have contacted me and have been asking for info on the CDN market, I can’t use their names. But think of all the major telcos outside of the U.S. who may want to enter the U.S. with a CDN product. Most people are only looking at U.S. based telcos and there are a few telcos in Asia and elsewhere who are closely watching the U.S. market for CDN services.
Those european PTTs certainly have the financial firepower, it is true. But what they generally don’t have is 1) US fiber, and perhaps 2) a patent portfolio. They got burned heavily the last time they entered the US market 5-10 years ago, and they haven’t forgotten. The asian players you allude to I also am watching, they would need fiber to go with a CDN purchase and yes it is possible that they will in fact buy that fiber. I hadn’t put CDN together with that thought, thanks.
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