EdgeCast Takes the Carrier Plunge

January 9th, 2012 by · 2 Comments

In its quest to put a real dent in Akamai's dominance of the CDN space, EdgeCast Networks (news) [a subsidiary of Verizon (NYSE:VZ, news, filings)] has spent much of its effort in the past two years figuring out how best to work with carriers.  Today those efforts culminated in the formal launch of their licensed CDN program and the transfer of control  to a tier 1 US carrier of a fully functional CDN they built based on it.

While that US-based carrier was unnamed, we can speculate that it is the same one that has been said to be working with them for some time now:  AT&T (NYSE:T, news, filings). Last winter, we heard that AT&T had shifted gears and chosen not to roll its own. A 12-month phased adoption project as described by EdgeCast resulting in the acceptance and transferred conrol announced today matches up well with the timing of those rumors.  Just what AT&T will do with the CDN now that it is in place will be very interesting to watch as 2012 unfolds.

Pan-Pacific operator Pacnet also jumped in with both feet back in September, licensing EdgeCast's solution to deploy a CDN without having to re-invent the wheel. It's too early to tell how they're doing with it in the market, but one can argue that Pacnet's need for a CDN is as great as anyones if not the greatest. Nearly all its intercity links are undersea, and such bandwidth in the Pacific may be getting cheaper but it's still expensive relative to the Atlantic and that shifts the economics in favor of CDN.

The next step is federation of course. With their own CDN and that of their customers based on the same underlying technology, they will be working to enable all their customers CDNs to cooperate. That has the potential to solve the problem network operators face in figuring out how to scale a CDN that requires investment outside of the network footprint it is trying to leverage.   EdgeCast will surely be targeting the many carriers that dipped their toes in the CDN pool a few years ago but have mostly stayed on the sidelines since.  If federation technology is mature enough, there's a network effect there that could help their licensed CDN effort start to snowball.

2012 is shaping up to be a very interesting year in the CDN space. Consider all the data points: Akamai is on the move inorganically again as it migrates up the food chain, Level 3 is pushing hard for revenue growth in the more traditional CDN business, LimeLight is still making up its mind, EdgeCast is now powering several big carriers, and KDDI has big plans for CDNetworks.  There are lots of moving parts right now - pretty much all of them actually.

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Categories: Content Distribution · ILECs, PTTs

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