Established CDN players and telco rivals duke it out at CDN Asia 2012

As chairman of the CDN Asia 2012 conference in Hong Kong over February 7-8 I felt very much at times like a high-end divorce lawyer negotiating the separation between a married couple that were divorcing because of “irreconcilable differences.”

The event brought together the two opposing strands of the global CDN community, that being the well established ‘traditional’ CDN players such as US firms Limelight Networks and EdgeCast – as well as ambitious Chinese newcomer ChinaCache – alongside their new rivals from the telecom operator community.

The telecom players were represented by aggressive newcomers such as Japanese giant KDDI – fresh from its US$167 million purchase of an 85.5% stake in South Korean CDN operator CD Networks – as well as Australian operator Telstra and Indian-based player Tata Communications.

Setting their stall out
The basic argument from each of the rival camps as to why they would ultimately be the winners of the battle in the CDN space was very simple.

The long-established CDN players such as Limelight Networks insisted that operating a CDN was a far more complex operation than many telcos imagined, adding that the skill and expertise that traditional CDN’s had accumulated over years in the industry was not easily replicated.

Other traditional CDN players backed up this argument, claiming that although some of the major telcos would stick around in the CDN market – with Telstra gaining several name checks as an almost certain long term CDN operator – that others would likely abandon their go-it-alone models and return to using traditional CDN players.

Much opinion at the event seemed to suggest that whilst major operators would have the money and motivation to maintain their own CDN operations that many smaller operators would opt to continue their existing relationships with established CDN operators.

Hometown player Hong Kong Broadband Network unequivocally put itself into that camp with CTO Lo Sui Lun telling Informa Telecoms & Media that the firm would not be abandoning its near decade long relationship with CDN giant Akamai and that it had no plans to launch its own CDN operations.

Telstra details CDN expansion plans
The bigger telcos at the event were in a far more combative mood with Gary Traver, director of Telstra Media, conceding to the audience that setting up its CDN had been “harder than we thought it would be initially” but going on to claim that Telstra’s CDN was now a “great strategic asset.”

Traver told conference delegates that although Telstra’s CDN, developed with Cisco technology, was initially being used to optimise the performance of its OTT-delivered IPTV services that the firm was now expanding its CDN business.

In particular, Traver said that Telstra was now looking to host content from other content providers and was also looking to utilise its CDN to serve the Enterprise segment, a development which Traver said promised huge potential for the operator.

Meanwhile, Dr. Kazuhide Koide, Assistant Manager, IP Transport Network Development Department at KDDI got straight to the point in his presentation outlining how the operator would use its recent acquisition of CD Networks to help differentiate its fixed and mobile broadband services in the ultra competitive Japanese market.

CD Networks officials confirmed to Informa Telecoms & Media that post-acquisition dialogue with KDDI had focused heavily on how KDDI could utilise CD Networks technology to optimise delivery of video and gaming content to its 3G and 4G mobile subscribers, in an effort to provide a significant point of difference with mobile market giant NTT DoCoMo.

Moreover, Koide told delegates that the acquisition of CD Networks would enable KDDI to deploy a ‘3M’ based CDN strategy which would see the firm deploy content on a Multi-use, Multi-Network and Multi-Device strategy.

In addition, Koide said that the acquisition would enable KDDI to expand its domestic content offering from its current managed IPTV offering towards launching an audacious attempt to break down the long-running barriers between the country’s terrestrial broadcasters and telecom players by deploying broadcasters content on KDDI’s CDN.

CDN federation – time to make a move
Perhaps one of the most frequently mentioned subjects at the conference was that surrounding CDN federation, particularly amongst the telco CDN community, with most delegates saying that the expected to see significant advancement in CDN federation over the next couple of years.

There was a broad agreement amongst delegates that there were no significant technical barriers to CDN federation amongst the telco CDN players – a move which would make them a much more attractive option for content providers in particular – but that the barriers were far more likely to be political and commercial ones.

For his part though, Roy Peterkofksy, VP of product management at CDN analytics company Skytide, warned telco based CDN operators that they should not allow these issues to delay their move towards CDN federation, “You are up against a bunch of companies that come from a fast moving Sillicon Valley culture, unless you move fast [on CDN federation] you will be in trouble.”

Perhaps the most amusing moment of the conference came on the closing afternoon when Vietnam Post & Telecommunications (VNPT) executive Bui Thien Ha, head of VNPT’s external relations department, caused a surge in blood pressure amongst the vendor delegates at the event.

Ha told delegates that the Vietnamese giant was still mulling over its options in the CDN market – a market which he said VNPT was “extremely interested” in pursuing – and was currently leaning towards engaging the expertise of an established CDN operator to help it navigate the unknown waters of the CDN market.

Mr. Ha was last seen disappearing under an ocean of proffered handshakes and business cards from CDN vendor executives at the close of the event…..